Evolution of CIM's Data Center Strategy

Amid an unprecedented spike in demand for computing power for artificial intelligence (AI) and cloud computing,¹ data centers have become a fast-growing and in-demand asset class for real asset investors.²

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The cloud computing market is expected to expand at a 22% compound annual growth rate to $2 trillion in the next five years, with generative AI accounting for approximately 10-15% of the total.¹ The data center market is projected to experience a 63% revenue increase over the next five years, meaningfully outpacing other U.S. sectors.²

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Data centers serve a critical role for communities, supporting economic growth and technological innovation. CIM first invested in the asset class in 2018, developing a 240,000-square-foot San Francisco data center campus. Through that project and subsequent investments, our team earned valuable expertise in the nuances of data center development, acquisition and ongoing management.

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In the years since, we’ve continued to cultivate experience in the sector, investing across strategies. In 2019, CIM partnered with a Utah-based data-center operator to launch Novva Data Centers, a cutting-edge data center solution in the Western U.S. The company now has locations in five states and targets continued expansion.

On the credit side, in 2023, our CIM Real Estate Debt Solutions team discovered an investment they believed was underpriced -- investment grade rated commercial mortgage-backed securities (CMBS) bonds backed by a data center portfolio.  

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Drawing on extensive data center expertise, our infrastructure team validated the underlying portfolio before our credit team made the $73 million investment in the bonds, which were successfully redeemed less than a year later.

In 2024, our team closed on a $125 million bridge loan to Applied Digital collateralized by two operating blockchain data centers and one data center in development. The borrower was able to pay off the loan within six months due to the successful execution of its business plan.

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As reliance on cloud computing, AI and advanced cellular networks continues to grow, the data center market seems poised for further expansion. With expertise in the space, established partnerships and plans for further development, we continue to explore opportunities to provide value to communities and investors through additional data center investments in the years to come.

A timeline of CIM’s commitment to an expanding asset class

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2018:

• Builds San Francisco Data Center: CIM breaks ground on 400 Paul, a 240,000-square-foot data center campus in San Francisco. Read press release
• Acquires Chicago Data Center: CIM purchases a 66,000-square-foot data center offering connectivity to Chicago’s largest and most interconnected data center. Read press release

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2019:

• Acquires New York Data Center: CIM purchases a 232,000-square-foot facility 22 miles from Manhattan. Read press release
• Launches Novva Data Centers: CIM partners with Utah-based data-center operator to launch a hyperscale data center solution. Read press release

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2021:

• Sells Four Data Centers: CIM sells a portfolio of data centers in three states. Read press release

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2022:

• Announces Data Center Joint Venture: CIM announces it will construct and operate a 50,000-square-foot, data center near downtown Toronto with a joint venture partner. Read press release
• Increases Equity in Novva Data Centers: CIM invests an additional $355 million in the data center company it launched with a partner in 2020, bringing its total equity to $450 million. Read press release

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2023:

• Completes Toronto Data Center: CIM and a joint venture partner complete the data center they started building the year before. Read press release

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2023 & 2024:

• Novva Data Centers Announces New Locations: The Utah-based company CIM launched with a partner in 2020 announces new data centers in Nevada, California and Arizona.

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2024:

• Makes Loan Commitment to Applied Digital: CIM closes on a $125 million loan to fund construction of an Applied Digital campus in North Dakota. Read press release.