5 Data Center Real Estate Trends To Watch For
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When it comes to commercial real estate, data centers are trending. The industry has historically focused on traditional asset classes like multifamily, office and hospitality. But after the dot-com boom in the late 1990s, the culture of communication began to shift and commercial real estate was quick to follow.
Between 1997 and 2000, companies began building secure data facilities that processed and stored large amounts of information. A number of commercial clients looking for speedy internet connectivity began to rely on these centers to manage and operate systems. Twenty years later, data centers are among the strongest asset classes, and the demand for connectivity is not slowing down anytime soon.
As more companies invest in data center operations, new trends are beginning to arise in the commercial real estate space. Here are five to look for:
1. Data Center as a Service (DCaaS)
Data centers are becoming much more than storage facilities. Just like tech companies are adding professional services to their capabilities, data center owners now offer consulting services that pair clients with engineers and subject matter experts. International data center owner and operator T5’s Insight Operations Suite provides clients with a digital platform and online portal where they can track data center assets and manage operational conditions.
2. Increased Job Demand
Increased demand for data center space has created jobs and economic growth in large cities and small communities alike. The average data center construction employs 1,688 people, provides $77M in wages for local workers and produces over $240M in output among the local economy’s supply chain, according to a report from the U.S. Chamber of Commerce. Every year thereafter, the average data center generates 157 local jobs. It also contributes $32M to the local economy and generates over $1M in revenue to state and local governments. Data centers can indirectly drive job growth by hiring vendors that help run the data centers, as well as increasing information technology, telecommunications and software development jobs. Depending on the size of the project, investment in these facilities can promote further economic development by attracting new businesses and infrastructure changes in a specific region.
3. Smart Cities
The rise of smart cities and urban innovation in the U.S. can attribute a lot of its success to data. Data centers are helping cities increase connectivity and accessibility using advanced analytics and supercomputing. In a new smart city initiative, Atlanta has invested in a smart city command center that will analyze and monitor data to improve transportation and public safety across the city.
People use technology to connect with others across the world, and a data breach can pose a real threat to companies, government organizations and individuals. Data center owners and operators understand these risks, and are taking steps to keep information safe.
“T5 has implemented multiple security systems at our data centers,” T5 CEO Pete Marin said. “We have physically created rings of verification and access restriction, ensuring there can be no unauthorized access.”
The company has achieved all required compliance certifications and has continuously kept up with corporate expectations and standards.
5. Focus On Location
As global companies like Google, Amazon and IBM invest in data centers, site selection has become a major factor in growth projections. For T5, it is all about finding locations in the best markets for the customer. T5 owns and operates 18 data centers in 11 markets.
“We decided to build a data center in Atlanta because of the robust infrastructure, low cost of doing business and overall customer demand,” Marin said.
T5 recently announced plans to build a facility in Cork, Ireland. Cork was a natural fit because it connects the U.S. and Europe through a long-haul fiber network. The company plans to expand into more international locations in the coming years.
Marin will be speaking at the Data Center Investment Conference & Expo Southeast in Atlanta. Find out more here.
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