In the first episode of our series “Big Topics”, David is discussing data center site selection with an expert on this topic, Senior Vice President of Advisory & Transaction Services at CBRE, Brant Bernet. With decades of experience in data center real estate, Brant walks through the history of site selection, key considerations in site selection, and the future of data center site selection.
History of Data Center Real Estate
Innovation has improved the experience of site section in the data center real estate market. In earlier years of the industry, brokers would fly to proposed locations with a “toolbox” stocked with multiple items that are now all replaced by a smartphone. Tools such as Google Earth and Fiber Locator have reduced the need for physical tours and simplified connectivity research.
Key Components of Data Center Site Selection
Colocation providers, hyperscale users, and crypto miners are driving data center real estate market development. The need for large land parcels and a pathway for the largest power requirements in industry history are creating challenges in site selection. Land parcels of this size can only be found in certain areas and are decreasing in volume which is pushing demand to secondary markets. Due to rising land costs in response to the pandemic and increasing power demand, clients have a desire to move quickly in site selection. To do so, clients are utilizing land banking and are seeking powered shells or sites to scale rapidly. Users are also less opposed to traditional risks when factors such as connectivity, location, and availability are in their favor.
Future Data Center Site Selection Trends
As costs go down, opportunities for renewable energy will be attractive to clients in the future. Improvements in construction and volume of demand will lead to the selection of sites previously not preferred. Tertiary markets will continue to take on the burden of growth in response to the unwavering demand.
Please share and like this video if you found this information helpful and be sure to stay tuned for our next episode on data center construction!