With data centers sprouting up everywhere, here's who's actually building them at scale. Digital Realty Trust leads the pack with 300-plus facilities across 47 markets globally, followed by heavy hitters like Equinix (273 centers), STACK Infrastructure (130 sites), and DataBank (89 locations). AI demand is the primary catalyst. 73 percent of U.S. construction pipeline is already preleased, and colocation vacancy sits near zero. Institutional capital keeps pouring into infrastructure build-outs despite power constraints forcing operators to rethink traditional grid-dependent models.

Non-residential construction spending slipped into negative territory for the third time in four months, dropping 0.2 percent in August to $1.24 trillion annualized. Manufacturing and commercial categories led the decline, down 1.8 percent year-over-year, while momentum stayed concentrated almost exclusively in data centers - roughly one in seven ABC members now work on data center projects, reporting significantly higher backlogs than peers. With private activity buckling under elevated borrowing costs and materials inflation from tariffs, plus August data predating the 43-day government shutdown's impact, the construction pipeline faces headwinds outside digital infrastructure. Another data point showing how bifurcated CRE capital flows have become in this higher-rate environment.

December rate cut odds just collapsed from 97 percent to 22 percent in a matter of weeks. The Federal Reserve's expected pause follows September jobs data showing employers added 119,000 workers (more than double forecasts) while unemployment ticked up to 4.4 percent and inflation held at 3 percent annually. The 43-day government shutdown created a six-week blackout in economic data, leaving policymakers flying blind on October trends until after the December meeting. For CRE investors, this signals borrowing costs staying elevated longer, keeping pressure on office and retail valuations while reinforcing why data centers and industrial assets with locked-in financing continue outperforming debt-heavy sectors.

Office-to-data-center conversions just got a proof-of-concept in downtown Chicago. Legacy Investing dropped $40 million on the former Cboe headquarters at 400 S. LaSalle (a building that traded for just $12 million sixteen months earlier) after previous owners secured 33 MW of power capacity for the planned data center conversion launching late next year. The deal underscores how power provisioning creates value faster than traditional office repositioning in markets where vacancy remains elevated but network infrastructure is strong. Expect more institutional players eyeing urban office conversions where power access beats suburban greenfield timelines.

I spent last week digging through reader questions from the past six months.

One question came up more than any other:

"Saul, how do I raise capital for my first deal?"

Here's my $0.02 (and it's probably not what you want to hear)

Capital isn't your problem. Your deal is.

Before we talk mechanics, let's reframe how you think about capital.

Capital isn't an obstacle. It's a resource. One of three things every deal needs:

But capital is abundant.

There's over $300 trillion in global financial wealth. Nearly $400 billion in commercial real estate capital actively looking for a home right now.

Does that sound like there aren't enough dollars for your one deal?

So if capital is everywhere, why can't you raise it?

It’s helpful to think of it this way: capital is a referendum on your deal quality.

Capital either flows to you, or it runs away from you.

If you're chasing investors? Your deal isn't good enough.

Nine times out of ten, when a deal is truly good, capital shows up in droves. There's a line at the door.

Yes, track record matters. Operator quality matters. But those pale in comparison to one simple question:

Is this deal actually good?

Capital has no emotions. It doesn't care about your pitch deck or your pedigree. It cares about risk-adjusted returns.

If capital is running from you, listen to it. Drop the deal. Find a better one.

Now, let's get practical.

I recently did a masterclass with my friend Fernando Angelucci, who laid this out brilliantly.

(You can access the full recording here if you want the deep dive)

Here's the natural progression of raising capital:

Level 1: Friends & Family

This is where most operators start. Raising money as first-position mortgage loans. Small deals, typically under $500K. Low complexity, high trust.

Level 2: 50/50 Partnerships

Partner puts up the down payment. You secure a 70-75% bank loan. Split the profits. I did this for years before scaling up!

Level 3: Individual Deal Syndications

Now you're pooling capital from multiple investors for one deal. You'll need an SEC attorney to file the docs properly (yes, it's required). More investors, more complexity, bigger deals.

Level 4: Fund Structure

You're pooling money from multiple investors into a fund (capital that deploys across multiple projects). Still retail investors at this stage, but you're operating at scale.

Level 5: Institutional Capital

Larger checks. Cheaper cost of capital. But it comes with tradeoffs: more control requirements, diluted ownership, and layers of complexity.

Now, you don't have to graduate every level.

One isn't better than the other.

There are plenty of operators who've been working with three friends for 20 years and have zero desire to work with the Blackstones of the world.

But if your goal is to become a world-class fund manager (think Warren Buffett territory), this is your roadmap.

So, to summarize the two takeaways are:

Stop blaming the capital, and fix the deal!