The commercial real estate landscape has expanded well beyond office buildings, retail strip centers, and multifamily housing complexes. In 2025, some of the most actively financed property types in the nation are ones that most people never physically enter: data centers and cell towers. As the digital economy accelerates and demand for connectivity reaches record levels, savvy investors and commercial lenders are recognizing these assets for what they are, which is a distinct and highly compelling class of income-producing real estate. Understanding how these properties are valued, underwritten, and financed is increasingly essential for anyone operating in the commercial mortgage space.
Why Digital Infrastructure Qualifies as Commercial Real Estate
At first glance, a cell tower or a hyperscale data center may not seem like traditional commercial real estate. However, from a financing and investment standpoint, they share the fundamental characteristics that define the asset class: land, physical improvements, long-term leases, and predictable income streams. In fact, these properties often outperform conventional asset types on several key metrics. Cell towers, for instance, are typically ground-leased by major carriers such as AT&T, Verizon, and T-Mobile on initial terms of 25 to 30 years, with built-in rent escalators of 2 to 3 percent annually. Data centers are similarly leased to enterprise tenants and hyperscalers like Amazon Web Services, Microsoft Azure, and Google Cloud under multi-year colocation agreements.
The Real Estate Investment Trust structure further legitimizes these assets. Companies like American Tower, Crown Castle, SBA Communications, Equinix, and Digital Realty Trust are publicly traded REITs specializing exclusively in digital infrastructure, demonstrating that institutional capital has long embraced these property types. For private investors and commercial borrowers, the question is no longer whether these assets qualify as real estate. The real question is how to structure the right financing to acquire or develop them.
The Market Opportunity: Demand Drivers and Investment Trends
The investment case for data centers and cell towers is underpinned by powerful and durable demand drivers. Global data creation is projected to reach 181 zettabytes by 2025, according to Statista, up from just 64 zettabytes in 2020. Artificial intelligence workloads, cloud migration, autonomous vehicles, streaming media, and the continued rollout of 5G networks are each contributing to an insatiable appetite for digital infrastructure. This demand does not contract in economic downturns the way retail or hospitality real estate might; if anything, digital dependency accelerates during periods of disruption.
According to JLL's 2024 Data Center Outlook, primary U.S. data center markets absorbed a record 3,579 megawatts of power capacity in 2024, representing a 28 percent increase over the prior year and signaling unprecedented capital deployment into the sector.
On the cell tower side, CTIA reported that U.S. wireless carriers invested over $34 billion in network infrastructure in 2023 alone, and that pace has not slowed. With 5G densification requiring more towers in closer proximity to end users, the supply of suitable tower locations remains constrained while demand from carriers continues to grow. For investors, this dynamic translates to strong occupancy rates, minimal tenant turnover, and rising rents across the tower portfolio landscape.
Financing Structures: What Lenders Look For
Commercial lenders approach data centers and cell towers differently than they would a standard office or retail property, primarily because the income analysis is more technical and the physical assets are specialized. Here are the core financing structures and underwriting considerations relevant to each asset type:
- Ground Lease Financing for Cell Towers: Many cell towers sit on land that is owned by a private party and leased to a tower company. Lenders will carefully review the ground lease terms, remaining lease duration, and any buyout provisions before extending credit against the income stream.
- Data Center Construction and Bridge Loans: Greenfield data center development is capital-intensive, often running $10 million to $20 million or more per megawatt of capacity. Bridge loans and construction financing are commonly used to fund the build-out phase before stabilization and permanent debt placement.
- CMBS and Life Company Debt: Stabilized, investment-grade tenanted data centers are attractive candidates for Commercial Mortgage-Backed Securities and life insurance company lending, given their long lease terms and creditworthy counterparties.
- SBA 504 Loans: Smaller data center operators and co-location facilities that are owner-occupied may qualify for SBA 504 financing, offering below-market fixed rates and low down payment requirements.
- Sale-Leaseback Transactions: Corporate owners of data center infrastructure increasingly use sale-leaseback arrangements to unlock equity while retaining operational control, creating financing opportunities for commercial mortgage brokers.
Loan-to-value ratios for digital infrastructure assets typically range from 55 to 70 percent, reflecting the specialized nature of the collateral and the limited pool of alternative buyers in the event of a default. Lenders will scrutinize tenant credit quality, lease rollover schedules, power and cooling infrastructure redundancy, and the regulatory environment governing telecommunications and data privacy in the relevant jurisdiction.
Working With a Broker Who Understands the Asset
One of the most common challenges investors face when attempting to finance digital infrastructure is that many traditional lenders simply do not have underwriting frameworks for these asset types. A community bank that routinely finances strip malls or apartment buildings may decline a cell tower acquisition not because the deal lacks merit, but because the loan officer lacks the internal template to evaluate it. This is precisely where a knowledgeable commercial mortgage broker becomes indispensable.
An experienced broker with digital infrastructure expertise can match the borrower's deal profile to the right capital source, whether that is a specialty finance company, a debt fund, a CMBS conduit, or a life company lender. They can also help structure the deal to highlight its strengths, including tenant credit quality, income predictability, and the strategic scarcity of the underlying asset, in a way that resonates with underwriters who may be less familiar with the sector. Documentation requirements for these loans often include carrier lease abstracts, power and utility agreements, zoning and permit records, and environmental reports specific to the site, all of which a skilled broker can help assemble and present effectively.
As artificial intelligence infrastructure demands surge and 5G densification continues through 2026 and beyond, the opportunity set for investors in data centers and cell towers will only expand. Borrowers who move early to establish lender relationships in this niche, and who partner with brokers who understand how to tell the story of digital real estate to capital markets, will be best positioned to capture the growth ahead. Digital infrastructure is no longer a niche within commercial real estate; it is rapidly becoming one of its most vital and enduring pillars.
