Data Centers Becoming the Most Valuable Use of Real Estate
Data center development is prevalent and will continue to advance in large cities, driven by both opportunity in the market and local municipalities. Data centers are essential to the overall operations of a business. They provide secure, reliable and scalable computing and processing environments that support a company’s critical functions, which are central to the company’s mission. If they fail, it can cause significant damage to the organization’s financial stability and industry reputation.
As data requirements reinforce the importance of proximity, we’ll see more expansion projects as developers buy adjacent properties and demolish existing buildings to create new data center campuses or utilize existing infrastructure to make them more secure. This has been in development for years in the Bay Area in California and is now happening in northern Virginia as well. In major cloud corridors, economics will make data centers the most valuable use of real estate. The right location can enable you to maximize energy efficiency, reduce capital expenditures and increase bottom line return on investment.
Local government officials will seek to create data center corridors, concentrating digital infrastructure in locations that support growth. This trend is driven by the growing awareness of the economic benefits of data centers, as well as the downside of having a data center as your next-door neighbor.
As we continue to progress, data centers are becoming part of the real estate landscape in many communities. That’s why communities have launched initiatives to raise the profile of the industry, with improved signage identifying specific districts for the infrastructure. This is a big change in an industry that once prioritized the obscurity of data centers in the communities they serve. This trend will continue to expand as developers consider these as infill projects within major cities.
There are many economic considerations, site and building design factors regarding data centers that I have shared with clients. Data centers are continually evolving as technology advances and in response to the need for organizations to secure data and prevent interruptions in daily operations, which is critical.
Stay tuned for more blogs on this topic, as I will share more about trends and challenges for local governments, businesses and organizations in today’s IT environment.
Rich Keagy, PE, LEED, a senior associate and practice leader at Woolpert, collaborates on regional and global projects out of the firm’s Charlotte, N.C., office. A University of Akron graduate, Keagy has more than 27 years of senior leadership and consulting experience in civil engineering.