Investment giant Blackstone is expected to close a $3.46B CMBS offering to refinance a portfolio of data centers owned by subsidiary QTS, a deal that would reportedly be the largest of its kind this year.

The structured debt offering, first reported by The New York Times, would be backed by 10 QTS-owned data centers in six U.S. markets, including Atlanta, Dallas and Norfolk, Virginia.

While no additional information about the data centers involved in the transaction has been made public, the NYT reports the portfolio’s total energy consumption could power Burlington, Vermont, for five years.

Based in Overland Park, Kansas, QTS is one of the largest third-party data center providers in the world, with a portfolio of more than 3 gigawatts across more than 70 facilities. Blackstone acquired the formerly publicly traded REIT and took it private for around $10B in August 2021.

In the four years since, QTS expanded more than eightfold, serving as the vanguard of Blackstone’s aggressive push into the data center sector.

Blackstone’s upcoming data center securitization won’t be the first time the firm turned to single-asset, single-borrower CMBS to refinance data centers. Bisnow first reported in July that QTS had obtained a $1.5B CMBS loan to refinance a 93-megawatt data center near Atlanta and a 45 MW data center near Richmond, Virginia. Both facilities were fully leased to hyperscale tenants.

The use of asset-backed securities and CMBS tied to leased data centers has skyrocketed over the past two years, a trend industry experts say is the most significant shift in the data center capital markets landscape over that time.

This market is surging because data center firms need more capital to build more facilities, but despite unprecedented investor interest in the sector, potential buyers for these fully leased data centers are few and far between — a product of their multibillion-dollar price tags and comparatively low returns.

Given the scarcity of options for sales, developers are increasingly leveraging securitized debt markets to monetize stabilized assets. Eighteen ABS and CMBS deals totaling $13.4B closed in the first half of 2025, more than double the volume in the first half of 2024, according to JLL.

And while the first data center SASB was only issued in 2021, Goldman Sachs data shows data centers accounting for 13% of the entire SASB market.