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REIT.com: Data Center REITs Poised to Benefit from Increased Reliance on Technology

According to REIT.com,

Data centers REITs were the top performer across the REIT industry in the first quarter of 2020, and the sector is expected to remain an investor favorite going forward as the coronavirus crisis underscores its vital and expanding role in an increasingly digital economy.

Data center REIT returns rose 8.8% in the first quarter as broader markets declined. For the year to April 13, returns in the sector were 12.4% higher.

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According to Green Street Advisors analyst David Guarino, “historic returns have been driven by a secular demand story and recent Covid-19 resilience is attributable to the same forces in an even more virtual world than before.”

The coronavirus crisis is serving to fast-track trends that were already evident in the data center space, analysts said.

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Green Street’s Guarino agreed that data center REIT tenants appear to be financially healthy. “Limited disclosure makes it difficult to determine who exactly top tenants are, but odds are high the largest cloud and technology companies in the world are at the top of each REIT's tenant roster.”

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