Are Data Centers simply a real estate “asset class”? Hardly. Just as Covid and remote technology (InspireMeCollaboration.com) altered commercial real estate in a day, data centers and their dependency on power and evolving technology puts them in a class by themselves.
Missing the boat is a problem, but so is understanding the risk premium. Developing with a sense for future agility is essential.
Many of the newer Data Center facilities are projected to exceed a million square feet. Several already are well over 1 million square feet, with OpenAI’s Stargate campus in Abilene projected to reach 4 million square feet total. China Telecom’s Inner Mongolia Information Park tops out at over 10.7 million square feet.
For comparison, a Walmart Supercenter: 180,000 sq ft. A regional mall: 500,000–800,000 sq ft. The Pentagon: 6.5 million sq ft. The Empire State Building (total floor area): 2 million sq ft.
Does this new boom beg the comparison?
William Levitt, Frank Lloyd Wright, and Victor Gruen, along with government zoning, incentives, and taxation components, turned middle America into an inflexible automobile-dependent concrete ocean of shopping mall parking lots and parking garages. The US is still trying to unravel the mess of that dinosaur strategy, decades later.
Perhaps we can avoid shortsighted strategies that relate to Data Centers this time?
What could go wrong? https://lnkd.in/gSY9Dw6r
