KBRA Assigns Preliminary Ratings to Centersquare Series 2025-1 and Series 2025-2
28 Feb 2025 | New York
KBRA assigns preliminary ratings to three classes of notes (the Series 2025-1/2 Notes) from Centersquare Issuer LLC and Centersquare Co-Issuer LLC Series 2025-1 and Series 2025-2 (Series 2025-1/2), a colocation data center ABS transaction. The transaction represents the second ABS issuance issued by Centersquare Issuer LLC and Centersquare Co Issuer LLC (the Co-Issuers). KBRA’s rating analysis incorporates all prior debt issuance of the Co-Issuers. KBRA anticipates affirming the ratings of the Series 2024-1/2 Notes with the issuance of the Series 2025-1/2 Notes.
The Series 2025-1/2 Notes are secured by 26 data centers generating approximately $438.8 million of Total Annualized Monthly Recurring Revenue (AMRR) and approximately $208.9 million of Annualized Adjusted Net Operating Income (AANOI) as of December 31, 2024 (the Statistical Disclosure Date). This includes the fee simple ownership interests in 10 multi-customer enterprise data centers (43.6% of AMRR or 57.4% of AANOI) located in eight markets and leasehold interests in 16 multi-customer enterprise data centers (56.4% of AMRR or 42.6% of AANOI) located in 12 markets. The 26 data centers are comprised of approximately 1,168,428 square feet (sf) of data center space and can provide approximately 150.0 megawatts (MW) of critical load power to customers.
The data center colocation customers use the data center space for power, space, and cooling of their data center equipment, cloud services, business continuity and other professional services. As of the Statistical Disclosure Date, the portfolio is comprised of 1,081 unique customers, pursuant to separate customer contracts with a weighted average remaining contract term, including one auto renewal option, of 3.9 years. The largest customer accounts for 8.0% of AMRR while the top 20 customers account for approximately 39.7% of AMRR. The portfolio of customers operate in 15 unique industries. The top three industries include cloud and IT services (44.2% of AMRR), banking and securities (14.1%), and network service providers (12.8%).
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