News / US / cnbc
Data Center REITs May Benefit From Growing Resistance to New AI Infrastructure
Finance · Real Estate Investment Trusts · cnbc · 2026-09-08
AMZN, AAPL, ORCL, DLR, EQIX, IRM, VNQ, REET, IYR, NVDA
Rising community and regulatory pushback against new AI data center construction could ironically boost the value of existing facilities owned by major REITs.
What Happened
Regulatory Hurdles and Market Dynamics: Growing public opposition and local legislative moratoriums are complicating the development of new AI-focused data centers across the United States. While these restrictions may slow down expansion, analysts suggest they could inadvertently create a supply-constrained environment that increases the value of existing infrastructure.
Strategic Advantage for Established REITs: Major players like Equinix (EQIX), Digital Realty Trust (DLR), and Iron Mountain (IRM) possess significant land banks and established relationships with local municipalities. This operational experience allows them to navigate complex permitting environments more effectively than newer market entrants, maintaining their competitive edge.
Financial Performance and Growth: These data center REITs have demonstrated strong financial health, with many reporting second-quarter adjusted funds from operations that exceeded analyst expectations. Companies like Equinix and Digital Realty have also raised their full-year guidance, supported by recurring contractual revenue and consistent demand for compute capacity.
Investment Outlook and Risks: While some analysts warn that permitting delays could increase development costs and weigh on future growth, others remain bullish on the sector's long-term prospects. Investors are increasingly viewing these REITs as a stable way to gain exposure to the AI boom, offering a combination of tangible asset backing and reliable dividend yields.