Matteo Colombo We recently attended the annual REITWeek conference, where we conducted 36 meetings with REIT CEOs and CFOs. We also attended four organized dinners, one property tour, and a run around Central Park with a REIT management team to maximize our time in New York City with REIT executives. The key themes were: 1) a gradual thawing of the transaction market with bid-ask spreads improving; 2) development projects remain difficult to pencil until construction and financing costs regress; and 3) a general sense of optimism driven by stable-to-improving fundamentals across most property types.
We left the conference with several actionable ideas, which we present below along with key takeaways from our meetings. Data Centers We met with Equinix ( EQIX ) and Digital Realty Trust ( DLR ). Data centers are one of the darling sectors today given the backdrop of restricted new supply and unprecedented demand, which is being further propelled by the artificial intelligence (AI) revolution.
Only a year ago, both companies were talking about the potential for AI to drive new leasing; 12 months later, AI is already a significant contributor to new leasing, which is soaking up new space as quickly as it can be built, allowing data center landlords to push rents well above forecasts from a year ago. We initiated a position in DLR in October of 2022 in anticipation of restricted new supply due to power constraints across the world, particularly in Northern Virginia (the largest dat.
