Southern California’s hottest commercial real estate market is for tenants that aren’t human
LA TimesWhere Wilshire Boulevard begins in downtown Los Angeles, thousands of miles of undersea fiber-optic cables disappear into an ordinary-looking office tower. As artificial intelligence and cloud storage hoover up more and more space on the nation’s computer servers, real estate developers are racing to build new data centers or convert existing buildings to data uses. Construction of new data centers is at “extraordinary levels” driven by “insatiable demand,” a recent report on the industry by real estate brokerage JLL found. “Never in my career of 25 years in real estate have I seen demand like this on a global scale,” said JLL real estate broker Darren Eades, who specializes in data centers. With occupancy in conventional office buildings still down sharply from the effect of the COVID-19 pandemic and property values falling, data centers represent a rare ripe opportunity for real estate developers, who are pursuing opportunities in major markets such as Los Angeles and less urban locales that are served by plentiful and preferably cheap power needed to run data centers.
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