Welcome to “CRE Opportunities: Turning Warehouses Into Data Centers”
The pandemic hit every industry out there pretty severely and commercial real estate was no exception. In fact, this sector had to bear long-lasting damages as the extended lockdown forced a lot of businesses to shut operations. Many tenants had to close permanently.
Although the world is slowly opening up, there are still many vacant spaces that warrant attention. And this is where the boost in the data center industry can be fruitful.
Yes, a lot of companies have had to close their stores in recent times. But not all of them went out of business. Many retailers have realized the importance of e-commerce and are now focusing on expanding their online presence. E-commerce platforms need ample hosting and security.
All non-retail businesses also need increased dedication to the storing, processing and dissemination of their data and applications. Therefore it is not surprising that the need for and use of data warehouses is on the rise. Hence the opportunity of turning warehouses into data centers.
Why Is The Demand For Data Centers Growing Across The U.S.?
There has been significant growth in technologies in the past few years. All of them require data centers. Any company or organization that handles its users’ data must utilize data centers. As a matter of fact, if you have an account on any website, or if you ever use the internet to search for anything, you are taking up space in a data center located somewhere in the world.
Interestingly, the data industry specifically benefited from the pandemic, as many companies shifted even more of their work online. Yet even as things are getting back to normal, off-site work and the need for data centers is unlikely going to slow down. Data centers are undoubtedly the future, which is why it’s time that the world recognized their potential.
In addition to the traditional use for data centers, we now have a growing need for edge computing. The number of devices connected to the internet and the volume of data being produced is growing much too quickly for traditional data centers to accommodate.
Edge computing is a distributed IT architecture where some portion of storage and computing resources are moved out of the central data center and into the periphery of the network. Edge computing is reshaping IT and business computing. People are looking to adopt smart solutions in every field.
The demand for edge computing devices is increasing. And with this, the data center industry is expected to flourish even more.
On a side note, the world has realized that it needs to become more aware of climate change and modify accordingly. Warehouse data centers additionally offer sustainability which makes them a profitable option for the future too.
Why Unused Warehouses Are Easy And Affordable Options For Housing Data Centers
Still wondering why data warehouses are worth a thought? This is because warehouses are designed to store large batches of products. These spaces are not meant for visitation by customers. Hence, the interiors are simple, with no extensive measures taken for decor.
Warehouses don’t need to be designed to be welcoming to customers. The primary purpose of the space remains storage. Therefore, not much needs to be done to change the warehouse into a data center. Companies can use the commercial space to make it a warehouse data center without needing much in the way of renovations.
The best part is that repurposing warehouses actually takes little time. Considering the growth of e-commerce, it is an excellent option for the real estate sector to deal with its low occupancy and transform vacant spaces into data warehouses.
What Cities Are Seeing The Biggest Increase In Data Center Developments?
Let’s face it. The rise of the data center industry can be seen in every part of the US. However, there are some cities that deserve special mention in this regard. Let’s take a look.
Dallas is often favored by the business community due to its relatively stable atmosphere. This business-friendly city has enabled many wholesale colocation providers to expand their reach. To keep up with this demand, new data centers have had to be established.
This one is not really a surprise. It has minimal disaster risk. This, along with the excellent connectivity, has ensured that the market remains on the rise.
Northern New Jersey
Northern New Jersey remains among the cities with significant data center development mainly due to its proximity to Manhattan. Many global business sectors operate in this area, and there is always an impending need for warehouse data centers.
Santa Clara / San Jose / South Bay
These regions have seen the birth of many tech startups. The sustained demand for data centers has ensured that development continues to be on the rise here.
Northern Virginia / Washington DC
Everyone knows that Washington DC is the place for businesses. The demand for practically all industry segments is high here. It doesn’t look like things are going to change anytime soon, either.
How To Locate Warehouses That Will Make Good Data Centers
There are basically two principal aspects that need to be given the utmost importance for a data center: the facility and its infrastructure. If you want to find warehouses that can be converted into data centers, these are the two most important factors to consider.
The facility is basically the building to be used for the data center. Keep in mind that the datacenter needs an ample open space where the infrastructure can be deployed. It should have the following features: Adequate floor space so that all the IT infrastructure can be accommodated within it with ease. You have to think about not only your current needs but also the future. At the same time, the space should be affordable and easily accessible.
It’s vital for the facility to have adequate power. How else will all the IT infrastructure operate? When turning a warehouse into data centers to find a warehouse with affordable and clean power. There should be no fluctuations or disruptions.
The data center will naturally have a lot of heat.
After all, an enormous amount of power will be converted into computing. Hence, it’s best to find warehouse data centers with unconventional cooling techniques in place.
Security is just as crucial. The data center holds immense importance for every business. Therefore, it’s vital that its access remains controlled. Make sure to find a warehouse with no lapses in security.
So far, we have talked about the features the building must have for it to be considered for being made into a data center. Now, let’s move on to its infrastructure.
“Infrastructure” refers to the IT gear you will be deploying within the building. This equipment is needed to run applications and provide services to businesses without any interruptions. Below are the components to consider.
1. Servers that are needed to perform computing tasks
2. Storage subsystems like disk arrays
3. Networking equipment required for creating a business network like routers, firewalls and so on
4. Cables and racks that will interconnect the IT equipment
5. Arrangements for backup power in case of emergency
Remember, whenever a business decides to build a data center, it needs to focus on the design as well as the construction of the facility. Hence, these factors should also be considered if an existing warehouse is being made into a data center.
Finding data warehouse locations might be challenging. But you can always count on commercial tenant representatives to make the job easier for you. They have the tools and resources which enable them to find suitable commercial space within a short span.
If you have any questions about “CRE Opportunities: Turning Warehouses In Data Centers”, please leave a comment below.