Real estate · Industry brief

M&A activity in the US power and data center sectors accelerated significantly in the second half of 2025 and through the first half of 2026, following a slow first three quarters of 2025. According to panelists at the 35th energy finance conference (mid-June 2026), platform-level transactions and capital recycling have increased, with strategic buyers actively pursuing exit options. However, the market is highly bifurcated: larger platforms with substantial operating assets are finding buyers and running competitive processes, while mid-market and distributed generation platforms are struggling to find acquisition interest. Financial sponsors are increasingly exploring continuation vehicles and secondary sales to extend hold periods rather than execute traditional exits. Valuations for renewable energy and power projects have improved modestly due to strong electricity demand from data centers and increased inbound investment, with discount rates for newly built solar projects ranging from 11-12% levered after-tax over 40 years, down from 2020-2023 peaks. However, valuations remain below historical highs. The market has shifted from valuations driven by book earnings and cash yield—which supported higher acquisition prices—to metrics focused on internal rates of return and net present value, fundamentally changing the buyer profile for platform sales. According to industry sources cited, Blackstone completed a public offering of a data center yieldco, and Alphabet's acquisition of Intersect Power represented a strategic shift by hyperscalers to internalize power expertise. Data center moratoriums in certain communities are creating concern about spillover effects on renewable development, and preferred equity structures are becoming more common for capital raises as investors demand downside protection.