James Davidson, Houston-based capital markets partner in the REIT practice at Hogan Lovells, was a guest on the latest episode of the REIT Report podcast. He discussed the recent Fermi Inc. IPO and its implications for the REIT industry, particularly in the context of the energy and infrastructure assets that are needed to fuel the buildout of AI technology.
“The way to think about Fermi is that it's a mainstream attempt to finance the physical side of artificial intelligence with a REIT wrapper…that is highly investable to the broadest set of investors,” Davidson said. He discussed the evolving role of infrastructure in the REIT space, the potential for strong foreign capital investment, and the challenges faced in integrating energy and infrastructure assets into the REIT model.
Davidson added that energy campus REITs have the potential to grow from a position on the fringes of the REIT industry to one of its largest segments over the next decade. “That doesn't mean that every project will qualify as a REIT on day one. Qualification is tactical and fact-driven, but directionally, the center of gravity is shifting towards a campus-based, energy-anchored real estate platform,” he said.