How Location Technology and Data Helps Savvy Brokers Find Data Center Real Estate

We are reliant on technology, which is largely a good thing. Digital resources have enabled us to navigate our work and personal lives much more efficiently. Since technology has become indispensable, however, it is imperative that the information we need in order to conduct business is readily available and efficiently delivered to our devices. That’s where data centers come in.

A data center houses critical applications and information, using hardware and software like servers, routers, security devices, and storage systems. Companies seek multiple data centers in different locations to house the same data, helping mitigate risk in the event of a natural or manmade disaster.

Based on the growing need for data centers, there is clearly a need in the marketplace for commercial brokers who are skilled in finding facilities that are reliable and secure, as well as suitable locations where new data centers can be built. Per a Cisco study cited by Colliers International, capital expenditure on infrastructure for cloud-based services rose over 50 percent in the third quarter of 2018 as compared to the year before. Further, 83 percent of corporate executives and investors surveyed by CBRE expect the demand for cloud computing to continue to rise. This makes data center real estate a promising opportunity for commercial real estate brokers who have heavily industrial portfolios.

Data Center Site Requirements

One factor that makes data centers an exciting prospect for commercial brokers is that these centers don’t necessarily need to be built on massive properties. According to The News Funnel, the average industrial property housing a data center facility is just 150,000 square feet. This means there should be no shortage of promising opportunities within a given area.

More than anything, data centers must exhibit long term reliability and security. They must be able to guarantee—within reason—secure and uninterrupted power supplies, environmental controls such as ventilation and cooling systems, and accessibility to generators and external network operators. Because of the business impact of unplanned downtime, the best locations for these centers should be sufficiently removed from natural hazards or any other factors that could interrupt service. And again, this is a reason some companies—particularly financial institutions—require multiple facilities that mirror each other’s data.

How to Find Proposed Data Center Locations for Commercial Clients

The requirements are clear and typically non-negotiable, so how do commercial brokers find the right space? Savvy brokers aren’t using low-tech solutions to find attractive locations for these high-tech facilities. Instead, they are turning to location technology and data to find options for their clients quickly and efficiently.  

Dynamic search functionality is essential for helping commercial brokers effectively serve clients seeking data centers. Location technology allows brokers to filter for base characteristics such as property type, lot size, land use, and much more. Additionally, brokers can overlay hazard data to understand how factors such as flood zones or wetlands could impact a commercial property. This way, high-risk properties can be easily removed from search results to help brokers mitigate risk on behalf of their clients.

Brokers specializing in data centers should be able to find suitable locations based on specific client requirements. They must come prepared with multiple options, showing diversity in size and location, as well as an understanding of properties that best serve a company’s size and business needs. Location technology allows brokers to review assessed value and transaction history for properties under consideration, and a strong solution will also provide access to contact information for property owners. This gives brokers the information they need to make strong offers on behalf of clients and provide a proper point of contact to enter negotiations.

Adding location technology and data to their existing workflows helps ensure that brokers are presenting and acting upon only the opportunities that are most suitable for their clients’ specific data center requirements. In a highly competitive industry, this can easily make the difference between finding and winning off-market opportunities or missing out on potential deals entirely.

 

About the Author:

Robert Szyngiel leads Product Management at DMTI Spatial, a Digital Map Products company. He provides strategy and guidance to the data and software teams to assemble innovative solutions that leverage the company’s location intelligence intellectual property. Digital Map Products’ cloud-based location intelligence platform empowers over 17,000 commercial real estate professionals to find off-market opportunities and win more deals.

Tags Brokerage Best Practices Business Best Practices Data and Technology

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