Data Center Development
Anyone on here know of good data center developers. Interested in this line of development. Also, if you have any insight on how feasible this would be to on a smaller scale. I only have knowledge in the residential side of development.
In my head after learning how to do large multifamily and btr deals, it shouldn't be too hard to do a 20-30 unit btr deal, but is this the same with data centers? Are they all pretty large deals or could you do some one off deals on the side that are smaller and scale it up? Any information would be helpful. Cheers.
I have a minimal level of insight here- so take this as discussion rather than fact, lol.
But, I think because of the security costs, scale, and utility connections, data centers are a product type that truly benefits from bigger=better. I’m not sure the differentiation in data center caliber (is there even an A vs B?), but it’s an asset class I would imagine is moving towards homogenization due to the need for data security and the sheer volume of important information stored inside.
From the perspective of someone renting data center space: they’re all mostly high end tech companies who know the value and will pay for the top of the line specs. The only difference then is size and how many servers you can house inside, more = better.
From the developer perspective, as mentioned, there is a ton of expensive “fixed” costs, that are going to largely be there regardless of size. So, you need the size and scale to achieve profitability.
Again, spitballing here but I wouldn’t be too bullish on small scale centers, but maybe there’s some ability to do office to data center conversions?
Super helpful. Great insight. Really appreciate the response
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