{"id":1004735193,"date":"2024-10-31T04:17:17","date_gmt":"2024-10-31T12:17:17","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004735193"},"modified":"2024-11-04T06:37:48","modified_gmt":"2024-11-04T14:37:48","slug":"uli-special-report-the-dizzying-pace-of-data-center-investment","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/","title":{"rendered":"ULI Special Report: The Dizzying Pace of Data Center Investment"},"content":{"rendered":"
\n
\"Rob<\/a>
L to R: Rob Morris of SkyBox Datacenters, Matt Weisberg of IPI Partners and Kristina Metzger of CBRE. Photo by Therese Fitzgerald<\/em><\/figcaption><\/figure><\/div>\n\n\n

No property type has gone from niche to institutional as fast as data centers, and none has changed so quickly.<\/p>\n\n\n\n

One of the biggest shifts over the past 10 years has been the switch from multi-tenant and multi-story co-location facilities in urban settings to single-customer, single-story facilities in the suburbs. <\/p>\n\n\n\n

\u201cPretty much everything we’re doing is a single customer per building if not a single customer for the entire campus,\u201d said IPI Partners Managing Director Matt Weisberg during a data center session at the ULI fall conference in Las Vegas. \u201cThe density and economies of scale and everything really necessitate going with that.\u201d<\/p>\n\n\n\n

\n\n\n\n

READ ALSO:<\/strong> Getting in the Heads of Data Center Tenants<\/a><\/p>\n\n\n\n

\n\n\n\n

Therefore, capital requirements for the core and shell and the MEP demands have risen \u201cdramatically,\u201d Weisberg added. \u201c(With) our latest generation of buildings we’re doing, we easily have facilities that are going over $1 billion per facility because of the extreme density right now. And so capitalizing that\u2026is getting much more interesting than it was at the very beginning.\u201d<\/p>\n\n\n\n

Fortunately, the amount of capital converging on the sector has increased significantly. The current wave of investment was ignited during Covid-19 when data centers were responsible for keeping us online for entertainment, shopping, work and education, according to Kristina Metzger, vice chair of CBRE Data Center Capital Markets. <\/p>\n\n\n\n

“And suddenly it clicked for so many investors and individuals that no matter what’s going on in the macro economy, it doesn’t change our need to access data centers and information,” said Metzger said. <\/p>\n\n\n\n

During that period, there was a 46 percent increase in “MDAs” (main distribution centers), CBRE found. The advent of AI <\/a>created another push for investors. <\/p>\n\n\n\n

Diverse strategies and investment types<\/h2>\n\n\n\n

Investors come to data centers <\/a>with a variety of strategies\u2014from development to core, and data centers offer diversity because they are not always thought of as real estate, Metzger noted. They are also considered infrastructure, “TMT” (technology, infrastructure and telecommunications) and project finance.<\/p>\n\n\n\n

Meanwhile, investors are willing to write bigger checks. Five years ago, Metzger explained, there was a real bifurcation between powered shell investments (you provide the core and shell and some infrastructure while the tenant builds out the interior and critical infrastructure, maintains the space and operates it) and turnkey investments (you completely build out the space, maintain it and most likely operate it). Investors tended to favor shell investments as they learned the industry. As the property type has “institutionalized” and investors have grown more comfortable, there is now great interest in both powered shells and<\/em> the more capital-intensive turnkey projects. <\/p>\n\n\n\n

\n\n\n\n

READ ALSO:<\/strong> Capital Is Ready for the Next Upcycle<\/a><\/p>\n\n\n\n

\n\n\n\n

The cost difference between turnkey and shell is about three to one, Weisberg noted. But demand for this data center type tends to outweigh power shell because many tenants are growing rapidly and don’t have the capacity to build out their own projects.<\/p>\n\n\n\n

Not without risks<\/h2>\n\n\n\n

While the growth potential for data centers seems limitless, there are risks, including electric power, capital expenditures, economies of scale, obsolescence and environmental impacts, according to ULI\/PwC’s Emerging Trends in real estate report.<\/p>\n\n\n\n

Rob Morris, CEO of Skybox Data Centers, would put personnel. “There’s so few people that know how to design, build and operate data centers in the U.S.,” he told the audience. “So we’re just gasping for air in terms of finding, training and building new professionals in the space that can help us to scale because that takes some time.”<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Capital continues to pour into this sector and the checks are getting bigger.<\/p>\n","protected":false},"author":756,"featured_media":1004735199,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21755,21808,21825,21783,21742,51037],"tags":[32789,51525,51567],"class_list":["post-1004735193","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-data-centers","category-featured","category-finance","category-investment","category-latest","category-trends","tag-cbre","tag-ipi-partners","tag-skybox-datacenters"],"acf":[],"yoast_head":"\nULI Special Report: The Dizzying Pace of Data Center Investment - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ULI Special Report: The Dizzying Pace of Data Center Investment\" \/>\n<meta property=\"og:description\" content=\"Capital continues to pour into this sector and the checks are getting bigger.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2024-10-31T12:17:17+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-11-04T14:37:48+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/10\/IMG_8725-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"618\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Therese Fitzgerald\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/\",\"name\":\"ULI Special Report: The Dizzying Pace of Data Center Investment - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/10\/IMG_8725-1.jpg\",\"datePublished\":\"2024-10-31T12:17:17+00:00\",\"dateModified\":\"2024-11-04T14:37:48+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/72a93f240402a8c7f4e56a69aed5f713\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/10\/IMG_8725-1.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/10\/IMG_8725-1.jpg\",\"width\":800,\"height\":618,\"caption\":\"Rob Morris of SkyBox Datacenters, Matt Weisberg of IPI Partners and Kristina Metzger of CBRE. Photo by Therese Fitzgerald\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.commercialsearch.com\/news\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"ULI Special Report: The Dizzying Pace of Data Center Investment\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/\",\"name\":\"Commercial Property Executive\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/72a93f240402a8c7f4e56a69aed5f713\",\"name\":\"Therese Fitzgerald\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/02\/head.jpg?w=96\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/02\/head.jpg?w=96\",\"caption\":\"Therese Fitzgerald\"},\"description\":\"Therese Fitzgerald has nearly 20 years experience writing and editing commercial real estate content. She got her start writing about the New York City market with Real Estate Weekly and later joined CPE\u2019s predecessor publication, Commercial Property News, where she held various positions including editor in chief. In addition to working on the CPE and MHN websites, she edits CPE's Capital Markets Newsletter and MHN's Finance & Investment Newsletter. Tune into her Sustainability Street podcast on CPE.\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/author\/therese-fitzgerald\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"ULI Special Report: The Dizzying Pace of Data Center Investment - Commercial Property Executive","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/","og_locale":"en_US","og_type":"article","og_title":"ULI Special Report: The Dizzying Pace of Data Center Investment","og_description":"Capital continues to pour into this sector and the checks are getting bigger.","og_url":"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/","og_site_name":"Commercial Property Executive","article_publisher":"https:\/\/www.facebook.com\/CPExecutive","article_published_time":"2024-10-31T12:17:17+00:00","article_modified_time":"2024-11-04T14:37:48+00:00","og_image":[{"width":800,"height":618,"url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/10\/IMG_8725-1.jpg","type":"image\/jpeg"}],"author":"Therese Fitzgerald","twitter_card":"summary_large_image","twitter_creator":"@cpexecutive","twitter_site":"@cpexecutive","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/","url":"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/","name":"ULI Special Report: The Dizzying Pace of Data Center Investment - Commercial Property Executive","isPartOf":{"@id":"https:\/\/www.commercialsearch.com\/news\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/#primaryimage"},"image":{"@id":"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/#primaryimage"},"thumbnailUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/10\/IMG_8725-1.jpg","datePublished":"2024-10-31T12:17:17+00:00","dateModified":"2024-11-04T14:37:48+00:00","author":{"@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/72a93f240402a8c7f4e56a69aed5f713"},"breadcrumb":{"@id":"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/#primaryimage","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/10\/IMG_8725-1.jpg","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/10\/IMG_8725-1.jpg","width":800,"height":618,"caption":"Rob Morris of SkyBox Datacenters, Matt Weisberg of IPI Partners and Kristina Metzger of CBRE. Photo by Therese Fitzgerald"},{"@type":"BreadcrumbList","@id":"https:\/\/www.commercialsearch.com\/news\/uli-special-report-the-dizzying-pace-of-data-center-investment\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.commercialsearch.com\/news\/"},{"@type":"ListItem","position":2,"name":"ULI Special Report: The Dizzying Pace of Data Center Investment"}]},{"@type":"WebSite","@id":"https:\/\/www.commercialsearch.com\/news\/#website","url":"https:\/\/www.commercialsearch.com\/news\/","name":"Commercial Property Executive","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/72a93f240402a8c7f4e56a69aed5f713","name":"Therese Fitzgerald","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/02\/head.jpg?w=96","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/02\/head.jpg?w=96","caption":"Therese Fitzgerald"},"description":"Therese Fitzgerald has nearly 20 years experience writing and editing commercial real estate content. She got her start writing about the New York City market with Real Estate Weekly and later joined CPE\u2019s predecessor publication, Commercial Property News, where she held various positions including editor in chief. In addition to working on the CPE and MHN websites, she edits CPE's Capital Markets Newsletter and MHN's Finance & Investment Newsletter. Tune into her Sustainability Street podcast on CPE.","url":"https:\/\/www.commercialsearch.com\/news\/author\/therese-fitzgerald\/"}]}},"jetpack_featured_media_url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/10\/IMG_8725-1.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004735193","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/users\/756"}],"replies":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/comments?post=1004735193"}],"version-history":[{"count":9,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004735193\/revisions"}],"predecessor-version":[{"id":1004735306,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004735193\/revisions\/1004735306"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media\/1004735199"}],"wp:attachment":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media?parent=1004735193"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/categories?post=1004735193"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/tags?post=1004735193"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}