Unlocking New Potential: Repurposing Real Estate for Data Center Development
The demand for data centers continues to grow, driven by AI, cloud computing, and the increasing need for real-time data processing. While new developments face mounting challenges in securing large-scale power allocations, repurposing existing industrial and office assets can offer a faster, more efficient alternative—particularly for mid-sized deployments where speed to market and infrastructure availability are key factors.
Why the Market is Moving Toward Use Conversions
- AI and Cloud Expansion – The rapid growth of AI and cloud computing has created an urgent need for additional capacity, but power availability in major markets is slowing large-scale developments.
- Power Constraints Driving Smaller Deployments – Delays and uncertainty in securing new power are making smaller and mid-sized deployments more viable, especially in land-constrained regions where existing buildings with electrical infrastructure and utility relationships can accelerate deployment.
- Shifting Compute Demand – AI workloads, content delivery, and real-time applications are driving demand for infrastructure closer to users, making well-located existing properties attractive conversion opportunities.
Assessing the Viability of Existing Properties for Data Center Conversion
- Existing Power Infrastructure – Buildings near substations and medium- to low-voltage power lines that have capacity can often bypass long lead times for new large allocations.
- Fiber Connectivity – Proximity to internet exchange points and cloud on-ramps reduces networking costs and latency.
- Retrofitting Potential – Buildings that meet core structural and infrastructure requirements can be adapted for data center use more efficiently.
- Faster Development Timelines – Depending on zoning and permitting, conversions can often be completed on a shorter timeline than ground-up construction.
- Sustainability Considerations – Repurposing existing structures reduces the need for extensive new materials, making efficient use of prior investments in land and infrastructure.
Considerations for a Successful Conversion
- Structural Load Capacity – Can the building support weight, cooling, and airflow needs, or will cost prohibitive modifications be required?
- Power & Connectivity – Does the site have sufficient electrical and fiber access, or will significant upgrades be necessary to meet user requirements?
- Zoning & Regulations – Are there local restrictions that could impact a conversion?
- Building Height & Floor Plate – Does the space allow for efficient rack layout and cooling infrastructure?
- Site Size & Shape – Can the property accommodate backup power, cooling, and security needs?
- Value in the Dirt – Does the access to power and fiber make site redevelopment attractive?
A Timely Opportunity for Property Owners & Investors
As demand for AI, cloud computing, and high-performance infrastructure accelerates, repurposing existing assets presents a compelling opportunity for property owners. While not every site will be a fit, for the right properties, conversions offer a faster, lower-risk path to meeting market demand and maximizing asset value.
Exploring a data center conversion? Let’s connect.