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Every AI headline is about a model: a new release, a new benchmark, a new demo that goes viral overnight. But underneath every one of those models sits something far less glamorous and far more decisive, the physical infrastructure that makes intelligence possible at scale. Racks of GPUs. Substations. Cooling systems. Fiber. Land. Power purchase agreements negotiated years in advance.
Models come and go. Infrastructure is the layer that decides who actually gets to compete.
For the first two years of the generative AI boom, the constraint was chips. Now it's power, land, and permitting, and that shift changes who wins.
Goldman Sachs Research projects US data center power demand will climb from 31 gigawatts in 2025 to 66 gigawatts by 2027, more than doubling in two years. Data centers' share of total US peak summer power demand is expected to jump from roughly 4% to 8.5% over that same window. That is not incremental growth. That is a structural shift in how the country allocates electricity, and it is happening faster than the grid, permitting processes, or local political systems are built to absorb.
Which is exactly why New York's legislature just passed a moratorium on new large AI data centers, with Gov. Hochul following with an executive order pausing construction for up to a year. It's tempting to read that as AI infrastructure hitting a wall. The more accurate read: demand for this infrastructure has outpaced the physical and political capacity to build it. The moratorium is a pause, not a ban, and it doesn't change the underlying demand curve, it just confirms how scarce and contested this infrastructure has already become. States don't move to pause supply unless demand is outstripping what's easy to build.
McKinsey & Company estimates that AI-ready data center infrastructure will require between $3.7 trillion and $7.9 trillion in capital investment globally by 2030, depending on how fast adoption scales, with $5.2 trillion as their base-case estimate. Even at the low end of that range, it's a generational capital allocation shift, on the scale of the interstate highway system or the original electrification of the country.
The hyperscalers are already voting with their balance sheets. The four largest, Amazon, Microsoft, Alphabet, and Meta, are projected to spend roughly $725 billion combined on capital expenditure in 2026 alone, up around 77% from 2025, with the overwhelming majority earmarked for AI data centers, custom silicon, and power. Analysts expect that figure to cross $1 trillion in 2027. Add in Stargate, the $500 billion joint venture between OpenAI, SoftBank, and Oracle to build out AI data center capacity across the US, and the picture is clear: the companies with the best visibility into AI demand are betting more on physical infrastructure than on any single model or product.
AI applications are a land-grab, fast-moving, winner-take-most-for-now, and vulnerable to the next model release making today's product obsolete. Infrastructure behaves differently:
That's the distinction worth sitting with: the AI revolution won't just be defined by the companies building the models. It will be defined by whoever controls the infrastructure underneath them.
For investors, this creates a genuinely uncommon setup, a multi-trillion-dollar demand curve colliding with real, physical, near-term supply constraints on power, permitting, land, and water. That combination is what tends to reward investors who are positioned early, rather than chasing the loudest application-layer story of the moment.
But it also argues for discipline in how that exposure is structured. Pure exposure to early-stage AI infrastructure SPVs carries real risk, technology risk, execution risk, and the risk that any single project doesn't get built on schedule. That's the thinking behind the Growth Engine at King Fund III: selective, high-conviction exposure to AI data infrastructure, data pipelines, and digital assets, built on top of a defensive core of real estate-backed senior credit, so the tech allocation isn't carrying the portfolio's risk on its own. If the growth sleeve underperforms, the credit engine is there to absorb it. If it succeeds, it's uncapped.
The infrastructure underneath AI isn't the exciting part of the story. It's the part that decides how the rest of the story gets written.
Happy to share more with accredited investors exploring this space.
This article is for informational purposes only and does not constitute investment advice or an offer to sell securities. King Fund III LP interests are offered only to accredited investors under Regulation D, Rule 506(c), via confidential private placement memorandum. Past performance is not indicative of future results.
Real estate private credit is lending against property by non-bank institutions — debt funds, mortgage REITs, insurers, and specialty finance firms — rather than by traditional depository banks or the public bond market. The lender originates or acquires a loan secured by real estate and earns a return from interest and fees, sitting in the capital stack ahead of equity. For the borrower, it is a source of financing; for the investor, it is a way to earn contractual, secured yield without taking direct ownership risk in the underlying building.
The category sits inside the broader private credit boom. The U.S. private credit market has grown from roughly $500 billion five years ago to about $1.3 trillion today, and Moody's projects it will more than double to over $3 trillion by 2028. Direct lending alone now rivals the broadly syndicated loan market at an estimated $1.5–2 trillion. Real estate is one of the fastest-expanding segments within that universe, alongside asset-backed finance and infrastructure debt.
Three forces are converging.
Bank retrenchment. Post-2008 regulation, and more recently the 2023 regional-banking stress, pushed depository institutions to reduce direct commercial real estate (CRE) exposure. Rather than exit entirely, many banks have shifted to indirect roles — providing warehouse lines and note-on-note financing to non-bank lenders — which lets them keep a foothold without tying up as much risk-weighted capital. That leaves a widening gap in direct origination that private lenders are stepping in to fill.
The maturity wall. According to the Mortgage Bankers Association, roughly $875 billion in commercial and multifamily mortgage debt matures in 2026 — about 17% of the roughly $5 trillion outstanding. That is actually down about 9% from the $957 billion that matured in 2025, so the peak may be receding, but the volume remains historically large, and it collides with a very different rate environment. Many of these loans were written in 2019–2022 at 3–4% and now need to refinance at meaningfully higher rates. A $10 million loan that cost around $33,000 a month at origination can run north of $54,000 a month refinanced at today's rates — a swing of roughly $250,000 a year in debt service before accounting for any drop in property value. Borrowers who fall short of bank underwriting thresholds need flexible, structured capital, and that is squarely private credit's territory.
Investor demand. Institutional and high-net-worth allocators have been increasing allocations in search of higher yields, diversification, and downside protection that a secured, floating-rate loan can offer relative to public fixed income or equity.
"Real estate private credit" is not one thing. It spans the capital structure and the risk spectrum:
A single fund may run one strategy or blend several. Where it sits in the stack, and how transitional the underlying asset is, largely determines the risk and the return.
The appeal is contractual income secured by a hard asset, typically with floating rates that benefit when short-term rates are elevated. Recent performance has been comparatively steady: Brookfield reported that high-yield private real estate credit delivered a roughly 140 basis-point year-over-year increase in trailing twelve-month income yield, at a time when corporate direct lending saw yields compress by about 120 basis points — a reminder that real estate credit and corporate credit don't always move together.
Underlying credit conditions have also been improving off the 2023–2024 lows. In the CRE CLO market — an indicative, publicly reported slice of the broader CRE debt market — the share of loans in special servicing fell to 5.6% as of February 2026 from 9.1% a year earlier, and delinquencies dropped to 4.4% from 6.6% over the same period.
The risks are real and specific:
The property market has been going through a reset, and the opportunity set is uneven across sectors.
Multifamily, industrial and warehouse assets are widely viewed as among the stronger opportunities heading through 2026, supported by durable demand fundamentals. Specialized property types — data centers, life-sciences facilities, self-storage — are becoming a larger part of the investable universe, with data center financing in particular drawing capital from both public and private markets given the scale of demand.
Office remains the most distressed and closely watched sector, carrying a disproportionate share of troubled loans as remote-work trends and elevated vacancy weigh on values. For disciplined lenders, distress also creates opportunity: acquiring or restructuring loans on well-located assets at reset valuations, and providing the rescue capital that overleveraged owners need.
Real estate private credit has moved from a niche corner of shadow banking to a permanent fixture of how property gets financed. The structural drivers — bank capital constraints, a large refinancing pipeline, and steady investor appetite for secured yield — are unlikely to reverse quickly, and the lines between public and private funding channels are increasingly blurred, with many large CRE transactions now stitching together CMBS, bank debt, insurers, REITs, and private credit in a single deal.
That maturation cuts both ways. A larger, more competitive market can compress spreads and tempt lenders to loosen underwriting, and the asset class has not yet been fully tested through a deep, prolonged downturn. The lenders best positioned to perform are those with genuine credit discipline, real workout capability, and the patience to lend selectively rather than chase volume. For investors, the same principle applies in reverse: in an asset class where outcomes hinge on underwriting and structuring, manager selection is not a detail — it is the investment.
This article is for informational purposes only and does not constitute investment advice or an offer to sell securities. King Fund III LP interests are offered only to accredited investors under Regulation D, Rule 506(c), via confidential private placement memorandum. Past performance is not indicative of future results.
For nearly two decades, American real estate followed one script. People left the Northeast and the Midwest. They landed in the South. Migration turned into apartment demand, warehouse demand, and retail demand, and lenders followed the growth south with them. The pattern holds in 2026, though the newest data point to a narrower, more selective version of it. Population growth alone no longer guarantees returns. Jobs, infrastructure, and disciplined underwriting now separate the winners from the rest.
National population growth slowed considerably last year. The Census Bureau counted 1.78 million new residents between July 2024 and July 2025, a 0.52% rate and roughly half the 3.2 million added the year before. Most of the decline traces to immigration, which fell by more than half over the same period. Even against that slower backdrop, the South remained the fastest-growing region in the country, adding population at a 0.9% rate, down from 1.4% the year before but still ahead of every other region.
Georgia captured a meaningful share of that growth. Metro Atlanta added 61,953 residents in the year ending July 2025, a 0.96% increase that ranked third among U.S. metros for raw numeric growth, trailing only Houston (126,720 new residents) and Dallas (123,557). The gain pushed Atlanta past Miami, which lost an estimated 9,000 residents over the same period, and returned the metro to its position as the sixth-largest in the country. South Carolina was the fastest-growing state in the nation over the period, at 1.5%, with North Carolina close behind at 1.3%. Georgia, Florida, and Tennessee each posted gains large enough to rank among the national leaders as well.
The trend is not uniform. Several Sun Belt metros are cooling, while a handful of Midwest cities, including Minneapolis and Indianapolis, have shifted from net outflow to net inflow. Movers increasingly cite affordability, taxes, and cost of living as their primary reasons for relocating, ahead of climate or lifestyle. The regional story has narrowed from a broad migration trend to a shorter list of markets where the underlying fundamentals still hold. Georgia remains on that list.
Population follows jobs, and Georgia continued setting records through fiscal 2025. The Georgia Department of Economic Development closed the year with 423 facility expansions and new locations, representing $26.3 billion in committed investment, a state record, and 23,200 new private-sector jobs. Seventy-four percent of those projects came from companies already operating in Georgia and expanding in place, an indication of retained confidence among existing employers. Seventy-seven percent of the new investment landed outside the ten-county Atlanta metro, a sign that the growth extends well beyond the capital.
Atlanta's own draw remains intact. The metro ranks fourth among U.S. cities for the number of Fortune 500 headquarters, and Hartsfield-Jackson Atlanta International Airport has held the title of the world's busiest airport for 27 of the last 28 years, moving more than 106 million passengers in 2025 alone. The airport generates an estimated $70 billion in statewide economic activity and supports close to 380,000 jobs across aviation, logistics, and related industries, a scale of infrastructure few competing metros match.
Industrial demand has returned with force. Atlanta's industrial market absorbed 4.5 million square feet in the first quarter of 2026, its strongest start to a year in four years, pulling direct vacancy down to 7.5%, from 8.0% at the end of 2025 and 9.0% the quarter before, according to CBRE. Big-box vacancy fell below 10% for the first time in four years, and average net rents climbed to $7.54 per square foot by the end of 2025, up 3.4% in a single quarter. A construction pipeline of roughly 14 million square feet remains the key variable. Absorption will need to keep pace, or the market risks another wave of oversupply.
Multifamily tells a similar story in reverse. Atlanta delivered more than 61,000 apartment units between 2023 and 2025, the largest five-year supply wave the market has experienced since 2003, and rents fell for two consecutive years as the market absorbed the volume. That trend is now reversing. The construction pipeline has fallen 57% from a 2023 peak of more than 40,000 units under construction to about 17,100 today, and 2026 deliveries are on pace to fall nearly 50%, their slowest pace in over a decade, according to CBRE. Marcus & Millichap projects metro vacancy will decline for a third consecutive year, one of the steepest drops among major U.S. metros. Atlanta is not alone in this pattern. Miami, Charlotte, and Nashville are experiencing the same combination of fading deliveries and reaccelerating in-migration across the broader Southeast.
The correction has not fully worked its way through the system. Regional multifamily loans in CMBS special servicing reached 8.14% by early 2026, and delinquency climbed to 6.94%, up from 4.62% a year earlier, according to Cornovus Capital's tracking of the Southeast market. Properties financed at the top of the supply wave continue to work through refinancing and loan modifications. Disciplined, first-position lenders tend to find their best openings in markets working through a reset like this one.
Georgia and the broader Southeast are not immune to correction, as the multifamily supply wave demonstrated. Yet the underlying forces remain in place. Population gains continue to outpace the national average, even as the pace moderates. Georgia's business environment keeps attracting record levels of corporate investment. And the infrastructure behind both, from the airport to the logistics network built around it, is not something other metros replicate easily.
For a senior-secured lender, that combination matters more than any single quarter of rent growth or absorption. It means a deeper pool of borrowers to underwrite, more collateral moving through the market, and continued value in relationships built on the ground, something a national playbook run from a distance struggles to match.
King Fund III LP concentrates its credit sleeve in Atlanta and the broader Southeast for these reasons. Underwriting is conducted in-house, deal flow is proprietary, and the fund's principal has spent more than fifteen years building relationships across the region's real estate, banking, and legal community. Regional concentration functions as a competitive advantage rather than a constraint.
Happy to share more with accredited investors exploring this space.
This article is for informational purposes only and does not constitute investment advice or an offer to sell securities. King Fund III LP interests are offered only to accredited investors under Regulation D, Rule 506(c), via confidential private placement memorandum. Past performance is not indicative of future results.