Data Center Financing Strategies: Structures and Loan Terms, Unique Challenges, Risk Management

BarbriSFCourseDetails

Course Details

Course Information

smart_display Format
Live Online with Live Q&A
signal_cellular_alt Difficulty Level
Intermediate
work Practice Area
Real Property - Finance

Date & Time

event Date
Tuesday, April 22, 2025
schedule Time
1:00 p.m. ET./10:00 a.m. PT
timer Program Length
90 minutes

Credit Information

This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00

This CLE webinar will provide guidance for real estate counsel on navigating the complexities of data center financing. The panel will discuss financing strategies, structures, and loan terms and will highlight the unique financing issues and risks associated with data center development projects.

Faculty

Beckstead David

Shareholder

Womble Bond Dickinson

Mr. Beckstead has extensive international experience advising clients of all sizes – including Fortune 500 – on cross-border mergers and acquisitions, project finance, and project development, particularly in the energy and infrastructure sectors. He counsels lenders, sponsors, and contractors on projects and transactions across Asia, including Japan, Singapore, Thailand, Malaysia, Vietnam, Myanmar, Laos, Bangladesh, and Mongolia. His work has been recognized in Chambers Global, Legal 500, IFLR1000, and Asian Legal Business. Mr. Beckstead joined Womble from one of the largest full-service international law firms in Bangkok, Thailand, where he was a partner in the Energy & Infrastructure Practice Group.

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Description

Data centers have been developed (or existing buildings converted) so rapidly in recent years that they have emerged as a new real estate asset class. Due to demand and the Trump administration's support for data center investment, it is expected that there will be continued exponential growth in this sector for the foreseeable future.

Data center construction activity has created a strong demand from developers and infrastructure investors for project financing. Data center financings are specialized hybrid structures that borrow principles across debt markets and typically blend both real estate finance and leveraged finance loan terms. It is critical for real estate counsel to understand the financing complexities, loan terms, and risk assessment strategies unique to data center projects.

While the different financing strategies for data centers--real estate loan versus a corporate loan or leveraged loan--present unique issues, other financing challenges include whether the physical facility and the IT equipment will be bundled together or broken down into different loans and deals, the long project timelines and varying project costs, the ever-changing needs and priorities associated with the project, and whether the high per-square-footage valuations will hold over time.

Listen as our expert panel addresses the unique challenges and opportunities with data center financing and provides guidance for structuring these transactions.

Outline

Overview: data center growth and development
Unique challenges and considerations with data center financing
Common data center financing structures
Debt issuance strategies
Green loans
Sustainability-linked loans
Limited recourse financing
Equity financing
Securitization
Assessing and allocating the risks associated with a data center project
Specialized loan document terms
Leasing considerations
Practitioner pointers and key takeaways

Benefits

The panel will discuss these and other key considerations:

What are the unique issues and considerations for lenders and borrowers when financing the development of a data center?
What are common financing structures used with data centers?
How do lenders assess and allocate the risks associated with data centers?
How does data center financing blend loan document terms found in both real estate finance and leveraged finance?