- Data center development is driving demand for capital and power.
- Industry participants have reported that power availability, not capital, is the primary constraint; some projects face multiyear grid interconnection timelines.
- Market Street Capital’s platform lines up with each layer of need in the data center growth space.
Growing data center demand is increasing both financing needs and pressure on available power and grid connections. Market Street Capital is a capital markets and financial advisory firm with more than 20 years of experience in capital raising, M&A and advisory. The company works with established middle-market companies with enterprise values of $10 million to $1 billion on capital formation, and its platform includes a real estate practice that covers industrial assets and development sites.
Industry forecasts indicate substantial potential growth, although actual spending and capacity may differ from estimates. Amazon, Alphabet, Meta and Microsoft collectively plan to spend roughly $725 billion on capital expenditures in 2026, up 77% from the prior year. One industry forecast estimates that global data center capacity could nearly double to 200 gigawatts by 2030. Forecasts estimate that such growth could require about $870 billion in new debt financing.
According to industry participants, power availability, not capital, is the primary constraint; interconnection delays may extend project timelines. Lenders may therefore examine power-delivery milestones. A utility “will-serve” letter is not the same as powered land. A firm transmission agreement may provide stronger evidence of available power, but its terms and delivery dates require diligence. Analysts likewise rank speed to power as the top site selection criterion, seeing the bigger risk in converting financing capacity into delivered, power-enabled infrastructure on predictable timelines.
So where is the capital coming from? Real estate capital often finances the physical shell. High occupancy, long lease terms and strong hyperscaler credit continue to support valuations. Stabilized, leased assets can tap ABS, 144A bonds and CMBS, and some investors expect sales to REITs to be a key exit. Securitization has gained ground as a way to monetize cash-flowing portfolios at spreads that depend on market conditions. Some sponsors now finance on-site power separately, using the project finance market for power and commercial real estate capital for the buildings.
Private credit and infrastructure debt are filling gaps banks leave open. Bank syndicates remain cost efficient but underwrite conservatively, especially for speculative capacity that is not preleased. Direct lenders and infrastructure debt funds are stepping into construction loans, bridge facilities and mezzanine financings, offering flexibility at a higher cost. Private credit is increasingly a primary source of data center financing, drawn to projects tied to long-duration contracted cash flows. As of May 2026, 695 infrastructure funds were raising a combined $555 billion.
Hyperscaler commitments may mitigate some financing risks but do not eliminate construction, counterparty or power-delivery risk. In project finance, long-term leases with investment-grade hyperscalers may provide important credit support; leverage varies by asset and agreement and is not assured.
Meta’s Hyperion campus in Louisiana provides an example of a project-specific structure. Blue Owl-managed funds own 80% of the joint venture, while Meta leases the facilities and provides a residual value guarantee for the first 16 years. Investors now expect firmly committed, transparent hyperscaler credit before financing a project.
Sponsor equity funds development before those leases are signed. Platforms are land-banking sites in development vehicles and turning to structured preferred equity, joint ventures and forward sales that may permit earlier capital recycling. In some joint ventures, pension funds, sovereign wealth funds and infrastructure sponsors supply most of the capital while developers contribute entitlements and project management.
Market Street Capital’s platform offers services relevant to these financing needs. Its Debt Capital Markets & Specialty Lending practice advises on senior debt, unitranche and mezzanine financing, and structured lending for complex collateral. The practice draws on relationships with hundreds of institutional and specialty lenders. Its Private Equity Raises practice advises on growth funding and bridge financings for sponsors seeking equity ahead of long-term leases. Securities placement services, where applicable, are provided through Pickwick Capital Partners, LLC, Member FINRA/SIPC. No financing or transaction outcome is assured.
The firm’s real estate practice raises capital across the stack, from senior debt to preferred and joint venture equity. It has experience structuring transactions with REITs, debt funds, insurance companies and pension funds. Market Street also maintains a syndication network of more than 8,000 investors, family offices, venture capital firms and banks, which may assist in identifying potential infrastructure lenders and real estate capital providers; access to funding is not assured.
Data center projects face interconnection, construction and financing constraints that differ by project. Market Street Capital offers advisory services addressing REIT capital, infrastructure debt and sponsor equity in relation to interconnection dates and lease commencements.
For more information about the company, visit www.MarketStreetCP.com.
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