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The Hot New Trend in Commercial Real Estate? Renting to Data Centers

U.S. real estate developers "are having a hard time keeping up with demand," reports the Los Angeles Times, "as businesses in search of secure spots for their servers rent nearly every square foot that becomes available..." Construction of new data centers is at "extraordinary levels" driven by "i...

But when projects currently under construction or planned are complete, the U.S. colocation market, in which businesses rent space in a data center owned by another company for their servers and other computing hardware, will triple in size from current levels... Real estate investors and landlords are being drawn into the market because demand from tenants is high and they are likely to renew their leases after shouldering the costs of setting up data centers. The article includes "the mother of all data centers" in the western U.S. — a 30-story building where "thousands of miles of undersea fiber-optic cables disappear into an ordinary-looking office tower." Once a prestigious location for businesses, "The recent departure of a law firm that had been in the building more than 50 years cleared out five floors that will quickly be re-leased to data tenants, said Eades, who represents the landlord..."

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