What EBITDA multiple range is typically associated with data centers?

The EBITDA multiple range typically associated with data centers is recognized as being between 15-20 times. This range reflects the strong demand for data center services, driven by an increase in cloud computing, internet usage, and the essential role data centers play in supporting digital infrastructure. The higher multiple compared to other real estate sectors indicates that investors place a premium on the stable cash flows and growth potential provided by data centers.

Factors influencing this higher valuation include the strategic location of data centers, their ability to provide scalable and flexible services, and the long-term leases often associated with their clientele, which tends to include large tech companies and service providers. Furthermore, the increasing need for data storage and processing capacity fuels a favorable outlook for data center operators, thereby justifying the 15-20x EBITDA multiple range often observed in the market.