BREX Net Lease Data Center I DST

Overview

BREX Net Lease Data Center I DST is a $98.0 million Delaware Statutory Trust from Brookfield (Brookfield Real Estate Exchange) offering 255 Caspian Drive, a Tier III single-tenant data center totaling 119,756 square feet (6.5 MW of critical IT capacity) in Sunnyvale, California, in the heart of Silicon Valley. The facility is net-leased to Equinix (S&P: BBB+) with 4.4% annual rent increases and a master lease running to 2046; the trust is capitalized with $58.98 million of equity and $39.0 million of debt fixed via hedge at 5.25% through 2031, a 39.8% LTV. A 721 UPREIT exchange option into a Brookfield REIT may be available at the sponsor's discretion. The offering is made under Rule 506(c) with a $100,000 minimum.

Highlights

Tier III single-tenant data center (119,756 sq ft, 6.5 MW) in Sunnyvale, the core of Silicon Valley.

Net-leased to investment-grade Equinix (S&P: BBB+) with 4.4% annual rent increases.

$39.0M loan fixed via hedge at 5.25% through 2031; 39.8% LTV; long master lease to 2046.

Sponsored by Brookfield, one of the world's largest real estate investors, via its BREX 1031 platform.

$100,000 minimum; optional 721 UPREIT exchange into a Brookfield REIT at the sponsor's discretion.

Analysis

Insights

A rare net-leased Silicon Valley data center backed by investment-grade Equinix and institutional Brookfield sponsorship. Suited to 1031 investors seeking credit-tenant, inflation-linked income with 721 optionality, who accept single-tenant concentration and 2031 refinance risk.

Advantages

Investment-grade single-tenant credit (Equinix); contractual 4.4% annual rent growth; moderate 39.8% leverage; scarce Silicon Valley data-center asset benefiting from AI-driven demand; institutional Brookfield sponsorship; 721 optionality.

Concerns

Single-tenant, single-asset concentration (Equinix); remaining base lease term shorter than the hold if renewals are not exercised; loan maturity in 2031 creates refinance risk; data-center obsolescence and technology risk; projected distribution schedule not yet posted.

Projected Distributions

Average Yield4.98%

Est. Tax-Adjusted Yield¹11.21%

Cap Rate Equivalent8.11%

Y14.37%

Y24.66%

Y34.89%

Y45.29%

Y55.70%

Projected, not guaranteed. Distribution rates are the sponsor’s projections, are not a promise of performance, and can be reduced or suspended. ¹ Estimated Tax-Adjusted Yield reflects the projected impact of depreciation and amortization deductions at an assumed combined federal and state tax rate; individual tax outcomes vary — consult your CPA regarding your specific situation. Cap Rate Equivalent is a Baker 1031 Investments calculation intended to allow comparison with direct property ownership; it is not a sponsor-reported figure and does not represent a rate of return. See the private placement memorandum for the assumptions behind these figures.

Financing

LenderInstitutional (fixed via interest-rate hedge)

Interest Rate5.25% (Fixed via hedge)

Loan Term5 years

I/O Period5 years

AmortizationN/A (interest-only)

Y1 DSCR2.32x

Benchmarks

Avg. Income

This deal4.98%

Market5.13%

Meets Average

Growth

This deal30.43%

Market8.59%

Above Average

Peak

This deal5.70%

Market5.36%