I was looking at a Data Center investment in Prince William county south of Loudoun county where there are numerous data centers.
Sounded like a good opportunity, but then I looked at the numbers and the exit was based on a 4% cap rate.
My take is that all post 2018 CRE is based on completely unrealistic NOI, cap rates, and low loan rates.
Being super cautious on CRE investments at this stage. A lot of CRE use interest only products, so they expect to refinance every 5-10 years.
Maybe when there’s more defaults and some things shake out at a discount
