Datacenter Management Practices

"How to Evaluate a Building for Data Center Conversion" Earlier this week I shared how Chicago developers turned a $12 million office building into a $40 million data center in 15 months. Today, let's talk about what to look for. The Five Critical Factors: 1. Power Infrastructure This is the dealbreaker. Can you increase capacity to 30-50 megawatts? Existing transformers? Proximity to substations? The Chicago building had substantial electrical infrastructure from its trading floor days. Without power capacity, you don't have a deal. 2. Building Structure You need: Wide, column-free floors High ceilings for cooling Floor load capacity for server weight Cavernous layouts The Cboe building was designed for trading floors—which converts perfectly to data centers. 3. Existing Connectivity "This building is very heavily wired from its time as a trading platform," said buyer Daniel English. Look for heavy wiring, fiber proximity, and urban locations near connectivity hubs. 4. Cooling Potential CRE Daily reports liquid cooling is becoming standard as power densities jump from 120 kW per rack today to 600 kW by 2027. Can the building support liquid cooling systems and upgraded HVAC? 5. Urban Location Advantage English explained why urban conversions command premiums: "Just like Amazon last-mile delivery, data centers take less time to deliver when they're close." Low-latency applications—trading, streaming, gaming—pay premiums for urban proximity. The Best Candidates: Former trading floors, financial services buildings, telecom facilities, heavy industrial with power infrastructure. My Take: The Chicago flip proves it: The biggest returns aren't in greenfield development. They're in buying assets where someone else already solved the hard problems and the market hasn't caught up. What building in your market has these five factors? Because while everyone else sees obsolete real estate, you might be looking at a 233% return in 15 months. What are you seeing that others are missing? Sources: "Flip of former Cboe Global Markets headquarters in Chicago shows soaring data storage values" by Ryan Ori, CoStar News, October 23, 2025; "Data Centers Driving Growth In AI And Real Estate" CRE Daily, PrincipalAM research

𝙋𝙤𝙬𝙚𝙧 𝙝𝙖𝙨 𝙧𝙚𝙥𝙡𝙖𝙘𝙚𝙙 𝙛𝙞𝙗𝙚𝙧 𝙖𝙣𝙙 𝙢𝙚𝙩𝙧𝙤 𝙥𝙧𝙤𝙭𝙞𝙢𝙞𝙩𝙮 𝙖𝙨 𝙩𝙝𝙚 #𝟭 𝙨𝙞𝙩𝙚 𝙨𝙚𝙡𝙚𝙘𝙩𝙞𝙤𝙣 𝙙𝙧𝙞𝙫𝙚𝙧. Most teams have not adjusted. For two decades, site selection started with fiber routes, latency, and incentives. Power was a check box. In 2026, power is the constraint. It dictates timeline, cost, and viability. Everything else is secondary. JLL is projecting average global build cost at $11.3M per MW for 2026, up from $7.7M in 2020. That delta is not general inflation. It is interconnection scarcity showing up in capex. What is actually happening in the field right now: • Sites with existing substations near retiring coal or industrial loads are commanding premiums. You are buying time, not just land. • Behind-the-meter natural gas is no longer a temporary bridge. It is the primary path when grid timelines exceed 3 to 5 years. • Operators willing to run hybrid power strategies are beating “wait-for-grid” models on speed to market. That gap is widening. If your deck still leads with fiber maps, you are optimizing the wrong variable. Lead with megawatts, queue position, and time-to-energize. Then design network, cooling, and tax strategy around that reality. Board-level translation: Power access is now the gating factor for revenue realization. Miss it and nothing else matters. What is the first question your team asks on a new site today: power or latency? #DataCenters #AIInfrastructure #SiteSelection #RoyaleStakes

Most people analyze data centers like real estate. That is the mistake. After reviewing projects across the U.S., Europe, the Middle East, and Asia, one pattern keeps repeating. About 20 percent of variables explain 80 percent of outcomes. And those variables are not what most people focus on. The five that matter most are: 1. Power first. A data center is a machine that converts electricity into compute. No reliable power, no economic project. 2. Land control next. Not acreage, but control. Zoning certainty, expansion rights, water access, and fiber proximity determine whether a site becomes a long-term campus or a stranded asset. 3. Then capital. These are front-loaded projects. Impatient equity or unrealistic debt timelines can sink even strong projects. 4. Demand matters, but differently. Forecasts do not finance infrastructure. Contracts do. AI drives demand, but also volatility between training clusters and distributed inference. 5. Finally, sequencing. Discipline here separates winners from losers. The correct order is clear. Reverse it, and risk compounds. Underwrite power pathways and capital alignment before square footage. That is where the real returns come from. The winners are the ones who see the signals others ignore. Infrastructure strategy is not about buildings, It is about timing, control, and certainty. Read the article below. #datacenters

Data Center Site Selection The Decision That Defines Everything... . . Before design, before equipment there’s one decision that shapes the entire data center lifecycle: site selection. A great design on the wrong site will always struggle, while the right location can unlock efficiency and resilience. Why Site Selection Matters It’s not just about land, it’s about risk, reliability, and growth. Location impacts power availability, cooling efficiency, latency, and operational continuity. Many inefficiencies are tied to site constraints, not equipment failure. How to Choose the Right Location Power availability is critical, without it, growth is impossible. Connectivity ensures access to fiber routes and low latency. Environmental conditions like temperature, humidity, and risks (floods, seismic) directly affect design complexity and cost. The Stages of Site Selection It starts with region selection, stability, regulations, and proximity to users. Then site screening, power, connectivity, and risks. Finally, technical and financial assessment, including expansion potential. The Power Challenge: A Growing Constraint With AI and high-density workloads, demand for power is rising fast. In many regions, grid capacity is struggling, making site selection dependent on access to diverse energy sources. The question is no longer “Where can we build?” It’s becoming: “Where can we power?” Site selection is a long-term commitment. It defines efficiency, scalability, and resilience. 💬 For data center professionals: What is the most critical factor today power, location risk, or connectivity?

Everybody thinks their site is perfect for a data center. Almost nobody's asking the right question first: can the grid actually deliver power here and how fast? And it's the difference between bringing a site to market that gets serious attention and one that gets passed over entirely. If you're a landowner, developer, or broker trying to attract data center users, the traditional playbook doesn't apply. Location, access, building specs, all secondary. The first thing a data center buyer is underwriting is power. Not "is there power nearby." Can the utility actually deliver the capacity this facility needs, on a timeline that works (I'm in the middle of this in Los Angeles)? A site can sit a mile from a substation and still be years away from getting adequate power. Utility entitlements, grid capacity, transformer lead times, interconnection queues, these are the real bottlenecks. In many markets, the queue for new data center power is 3–5 years. The building goes up in 18 months. The power takes twice that. If you're bringing a site to market, the first question isn't "what can we build?" It's "what can the grid deliver, and when?" A site with power available now is worth dramatically more than one that checks every other box but sits in a multi-year utility queue. Most landowners don't know where their site stands until a buyer tells them it doesn't work. Then there's water. I've been digging into this because I kept hearing two opposite takes, "data centers drain all the water" versus "water isn't really an issue." Turns out both sides are right, depending on which generation of facility you're talking about. Older data centers used evaporative cooling, basically giant swamp coolers that lose 70–80% of their water to evaporation. A large facility can consume 3–5 million gallons a day. That's where the reputation comes from, and it's legitimate. But here's what I'm learning: the higher-density AI facilities are moving in the opposite direction. At 50+ kW per rack, air cooling physically can't keep up, so operators switch to liquid cooling, closed-loop systems that recirculate coolant and cut freshwater use by 70% or more. Microsoft has already deployed facilities that use zero water for cooling. Even in desert climates. Zero. The irony is that the most power hungry data centers may end up being the least water intensive. The technology shift changes the equation entirely. Still learning the nuances, but the narrative is clearly more complex than either side lets on. Jim Kerrigan, SIOR of North American Data Centers breaks down the power and site selection side in under five minutes, what makes a site attractive and what kills a deal before it starts. Worth the watch. Full episode on the Industrial Insights Podcast Grant La Bounty Chris Vassilian