A Dallas-based data center developer and operator is seeking to refinance two of its local facilities through a more than $1B CMBS loan.
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CyrusOne is slated to land the $1.05B refinancing for its adjacent DFW3 and DFW4 data centers on Chelsea Boulevard in Allen. The new fixed-rate, five-year loan was negotiated with Wells Fargo, National Association, Barclays Capital Real Estate, Citi Real Estate Funding, Goldman Sachs and Morgan Stanley, according to a presale report by Kroll Bond Rating Agency.
The mortgage is expected to close on May 20.
Proceeds will be used to refinance around $1B of existing debt and pay closing costs.
The data centers were developed between 2017 and 2025 and provide 76.5 megawatts of capacity. They are nearly fully leased to two hyperscale tenants and nearly three dozen smaller users.
CyrusOne did not immediately respond to a request for comment on the loan.
The company has around 60 data centers across the U.S. and Europe that accounted for 1.1 gigawatts of in-service capacity and 1.8 GW of contracted capacity as of the end of 2025. CyrusOne is owned by a consortium of investors, including funds managed by KKR & Co. and Global Infrastructure Partners, a subsidiary of BlackRock.
A March appraisal of the portfolio by Newmark valued the data center properties at nearly $1.6B. Based on that appraisal, the loan-to-value ratio for the financing is 66.8% with a debt yield of 9.3%.
KBRA estimated the portfolio’s sustainable net cash flow at around $88.6M.
The data centers’ tenancy is concentrated but undisclosed, according to the presale report. The largest tenant at the two facilities is a cloud and information technology services company that fully occupies DFW4 and a portion of the other data center.
That company and the data centers’ second-largest tenant accounts for nearly 91% of base rent.
“The reliance on a few tenants introduces binary default risk, as the majority of the income is generated by a few lessees rather than a diversified roster of tenants,” KBRA’s presale report says.
However, that risk is mitigated by the industry’s historically high lease renewal rates and the large share of base rent generated by high-quality, creditworthy tenants, according to the report.
Data centers have quickly become a key driver of the CMBS market, accounting for 13% of such transactions last year. Developers are funneled to the CMBS market because other funding sources often don’t have enough capital to support the growth.
But with that rise in CMBS loans, special servicers have raised concerns about the difficulty in evaluating data centers. The lack of transparency, along with quickly evolving technology and a surging supply, has been cited as a red flag for the industry.
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