Data Center REITs Emerge as Quiet AI Beneficiaries With Income Appeal

CNBC reported Sunday that data center real estate investment trusts are emerging as overlooked beneficiaries of artificial intelligence growth. These vehicles also generate consistent income for investors.

The ‘Toll Booth’ Case for Data Center REITs

Tejas Dessai, director of thematic research at Global X ETFs, describes data center REITs as the infrastructure layer every AI interaction must pass through. He frames them as “toll booths” sitting at the center of the AI economy. His firm manages the Data Center and Digital Infrastructure ETF.

Wells Fargo Investment Institute analyst John Sheehan published a note this week highlighting what he called unprecedented demand for these facilities. Sheehan cited durable growth prospects, attractive margins, and strong pricing power as reasons to view the subsector favorably. He added that expanding AI use cases continue to underpin sustained demand.

A Strong Year Backed by Structural Demand

Data center REITs have outpaced every other real estate category in 2026. The group gained nearly 40% year to date through April 30, according to industry group Nareit.

Three names currently sit on the FTSE Nareit U.S. Real Estate Index. Equinix operates more than 280 data centers globally and carries a 1.9% dividend yield. Analyst consensus rates it a buy, with roughly 14% upside to the average price target. Raymond James upgraded Equinix to strong buy in late April, citing its global scale and network density as durable competitive advantages. Shares have risen 38% this year.

Digital Realty Trust runs more than 300 facilities and yields 2.5%. Goldman Sachs rates it a buy. Analyst consensus points to nearly 16% upside. Iron Mountain rounds out the trio after pivoting away from physical document storage toward data infrastructure.

Background: Why REITs Suit the AI Build-Out

John Worth, executive vice president at Nareit, argues that publicly listed data center REITs hold a structural edge over private peers. Access to public equity and debt markets allows them to raise capital at scale. He believes the construction pipeline required to meet AI demand exceeds what private markets alone can finance.

The companies already operate roughly 600 facilities worldwide at near-full occupancy. That existing revenue base provides stability independent of AI-specific contracts. Worth expects these REITs to focus less on large-scale model training and more on inference workloads. Latency, location, and interconnection become critical at that stage — areas where established REIT portfolios already excel.

Blackstone Digital Infrastructure Trust recently joined the public market, listing on the New York Stock Exchange last week. Worth expects more private data center portfolios to follow.

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