This week, Joe Tsai, the billionaire owner of Chinese conglomerate Alibaba Group Holding, expressed his shock and concern at the pace of U.S. data center development. 

“I start to see the beginning of some kind of bubble,” Tsai said Tuesday. “I start to get worried when people are building data centers on spec.”

That isn't stopping a real estate heavyweight from charging ahead.

This morning, Related Cos. announced it is looking to raise $8B to build data centers and already has $45B worth of developments in its short-term pipeline. 

CEO Jeff Blau — manning the helm while Chairman Stephen Ross is busy pumping billions into West Palm Beach — called digital infrastructure “one of the most remarkable growth categories and asset classes that I have seen in my more than 35 years in real estate development.”

It is starting with $500M in investor commitments and a 64-megawatt data center expansion in Ontario, Canada. Coming soon is a Chicago project for PsiQuantum that is set to host the world’s largest quantum computer and a massive 1.2 GW project in Missouri.

Related is just one in a long string of companies betting big — really big — on data centers even as the fears of a bubble are rising and there has been some pullback in demand. Microsoft reportedly yanked another 2 GW of capacity out of its pipeline this week. 

The possibilities are just too good to pass up, it seems, and no one has really lost their shirt yet from building server farms. 

— Catie Dixon, Mark F. Bonner, Kayla Carmicheal and Jay Rickey

Not getting The First Draft in your inbox? Click here to sign up. Got any feedback or want to send us a mailbag letter? Email firstdraft@bisnow.com.

CRE News Quiz

Family Dollar sold this week for just over $1B, a massive loss for Dollar Tree, which spent $9.2B in 2015 to purchase it. That deal happened after a famous activist investor agitated for a sale. That investor promptly sold his entire stake and made a $200M profit. Who was the investor?

(Answer at the bottom.)

On Our Radar

• CRE prices are up again, largely because retail is crushing it. The RCA CPPI National All-Property Index of sales prices rose 1.3% YOY and 0.6% MOM in February, building on January’s gains. MSCI said the annualized numbers imply a 7% growth rate. Retail logged 4.9% YOY price growth last month, suggesting a 10.1% annualized increase. That’s a huge change of fortunes from the 3% drops retail clocked a year ago. Industrial prices also grew in February, while other property types saw their rate of decline ease. MSCI said investor sentiment is improving and greater alignment between buyers and sellers is spurring more sales. This week’s $1.1B purchase of retail properties by RCG Ventures is case in point.

• ​​Blackstone’s logistics love affair and UK M&A spree continue. The board of UK-listed logistics owner Warehouse REIT said today it intends to recommend the company accept Blackstone’s expanded £489M takeover offer. That would make it the third public logistics owner Blackstone has taken private in the last few years, after St Modwen and Industrials REIT. It comes on the same day LondonMetric agreed to take over listed firm Highcroft, as small-cap listed UK property owners continue to get snapped up and privatized.

• Stablecoin is taking center stage, and CRE is here for it. The House unveiled a bill yesterday to regulate the cryptocurrency, which is less volatile than other digital coins because it’s tied directly to another asset, often the U.S. dollar. The Senate Banking Committee has already approved its own version that will likely hit the Senate floor soon. The market cap for stablecoin hit a record $230B this month, and there have been multiple announcements of new stablecoin in the last month, including two this week: Fidelity Investments and Trump-backed World Liberty Financial. While CRE has had its eye on crypto for a while now, the rise of the more predictable stablecoin could be that last factor that pushes the industry into its use.

• Calling employees back to the office? You probably need more collaborative space than you think. A VTS survey released this morning shows 79% of tenants say their workplace doesn’t have enough space for them to collaborate. But that’s actually just the second-largest concern for tenants — technical experience issues are the top frustration. Safety and security concerns are No. 3 on the list.

• On this day in 1939, the first March Madness winner was crowned when the University of Oregon beat Ohio State 46-33. The madness starts up again tonight, and we’ll be watching to see if there’s a rankings shake-up in the First Draft bracket. 

Today’s Deep Dive: U.S. Multifamily Firms May Be Winners Of The Trade War

The most sweeping tariffs since President Donald Trump took the White House are set to go into force next week. It’s at least the third attempt at imposing the fees, and the president himself may be the only person who really knows if they’ll actually be levied. 

Still, Matthew Sharp, the co-founder of multifamily investment firm Hamilton Point Investments, knows one thing is certain about a trade war.

“This will be really bad for developers, really bad for tenants, for residents, but it’s actually kind of good for people like me and for owners of current properties,” Sharp said. 

Read the full story here.

This Morning’s News

INDUSTRIAL — Growing Share Of Occupiers Buying Instead Of Renting (Bisnow): The number of industrial sales to owner-occupiers rose 32% YOY in 2024, contributing to a 5% increase in sales price. Read more here.

ECONOMY — Growth Now Depends On Electricity (WSJ): Economic growth is now reliant on electricity more than oil, a significant shift in global energy dynamics. Read more here.

DATA CENTERS — Supply Chain Bottleneck Gums Up Short-Term Answer For Energy Woes (Bisnow): A gas turbine shortage is killing data center developers’ dreams of using natural gas as a short-term solution for power shortages. Turbine manufacturer lead times now extend past 2029. Multiple gas power plant projects have been cancelled since the start of 2025. Read more here.

RETAIL — GameStop To Offload More Stores (CoStar): GameStop leases its real estate and had over 3,200 stores in the U.S., Canada, Australia and Europe as of Feb. 1. Read more here.

TARIFFS — Hikes Starting To Appear In Macro Data (Fitch Ratings): Macroeconomic data like trade volumes and equities pricing is beginning to show the effects of U.S. tariff hikes, according to Fitch Ratings. Read more here.

PEOPLE — The Secretive Billionaire Behind America’s Most Corporate City (Bloomberg): Irvine Co. owns more than half the city of Irvine's apartment units, almost every shopping center in town and many of its office spaces. Irvine Co. also owns a golf club and the community newspaper delivered to its residents. Read more here.

HOUSING — KB Home Unveils Wildfire-Resilient Neighborhood (KB Home): In collaboration with the Insurance Institute for Business & Home Safety, KB Home has introduced the nation's first neighborhood designed to be resilient against wildfires. Read more here.

INVESTMENT — CLO Pools Deepen In 2025 With Billions In Fresh Dollars (CO): CMBS and CRE CLO issuance in 2025 is over $40.1B, an increase of 114% in activity YOY. Read more here.

INVESTMENT — Investment Activity To Pick Up In H2 (CBRE): CBRE is predicting sales will rise and cap rates will compress more than previously expected in the second half of the year if bonds continue to rally and macroeconomics remain strong. Read more here.

PEOPLE — Apple Names Retail Stores Chief (Bloomberg): Apple’s retail network spans about 535 stores around the world. Read more here.

HOUSING — Homes, Condos Get Less Affordable (Attom): A Q1 report shows homes and condos are less affordable compared to historical averages in 97% of U.S. counties. Housing takes up on average 32% of the national wage, above the 28% lenders prefer to see. Read more here.

CONSTRUCTION — NYC's Top Developers Are All-In On A Tiny Patch Of Madison Avenue (Bisnow): The Plaza District is getting a $15B to $20B makeover, from upcoming Extell and Related skyscrapers to luxury residential towers. The area is home to iconic upscale retailers and tons of jackhammers. Read more here.

POLICY — Florida Debates Lifting Child Labor Laws To Fill Jobs Vacated By Undocumented Immigrants (CNN): A Florida bill would allow 16- and 17-year-olds to work more than eight hours a day on school nights and over 30 hours a week during the school year without mandated breaks. Younger students who are home-schooled would also have fewer restrictions. Read more here.

POLICY — Delaware Punches Back At Texas Efforts To Lure Away Companies (WSJ): Over two-thirds of Fortune 500 companies are incorporated in Delaware. But some public company executives have grown frustrated with the Delaware courts, spurring the governor to sign a new law making it harder for shareholders to sue companies. Read more here.

FINANCING — 3650 Capital Secures $215M In New Investments (3650 Capital): The alternative commercial real estate lender and special servicer secured $215M in new investments from CalSTRS and Mubadala to deploy against its three investment strategies. Read more here.

LEGAL — FTC Bans E-Commerce Scammers (FTC): The Federal Trade Commission has issued permanent bans against operators of a fraudulent e-commerce business. The companies claimed consumers could earn large profits from online e-commerce stores that the defendants would establish and operate for them. They rarely, if ever, materialized. Read more here.

***

So You’ve Come For An Answer

Carl Icahn. 

He bought a 9.4% stake in the company in June 2014 and immediately demanded it sell. Dollar Tree bought it one month later but may regret that now that it took a massive loss in its sale this week to Brigade Capital Management and Macellum Capital Management.

***

The First Draft is produced by Director of Newsletters Jay Rickey, Managing Editor Catie Dixon, Editor-in-Chief Mark F. Bonner and Deputy Newsletter Editor Kayla Carmicheal, with an assist from AI. We’d love your feedback! Email us at firstdraft@bisnow.com.