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CRE Firms, Infrastructure Providers, and the Changing Data Center Industry

Jun 2022

Data centers have come to play a vital role in most people’s daily lives. In fact, while many other commercial real estate (CRE) asset classes were negatively impacted by the global pandemic, the demand for data centers skyrocketed. Why? Because the equipment that cloud data centers power and protect made it possible for frontline workers to help people in need, for remote workers to remain productive, and for people everywhere to stay in touch with their friends and loved ones (albeit virtually), or binge watch Netflix in an effort to pass the long days of lockdown.

Now, it's widely accepted that trends such as hybrid work models, remote learning, e-commerce, home delivery of just about anything, and virtual services like telehealth are here to stay. And so is the demand for data center resources. Technology giants including Amazon, Google, and Facebook have been aggressively expanding their data center footprints. In September 2021, Synergy Research Group estimated that there were more than twice as many hyperscale data centers worldwide than there were in 2016, and the number keeps growing.

The Rise of Hybrid Cloud

However, increased demand for cloud data centers had started before the pandemic struck. More specifically, demand was increasing for more flexible cloud data center architectures that could allow enterprises to run high-density workloads, meet global and regional regulatory and compliance mandates regarding where data can be used and stored, and improve user experience for websites and SaaS applications for customers and employees.

This type of hybrid cloud architecture—which can include on-premises data centers, multi-tenant data centers, edge data centers, and public clouds—give enterprises the flexibility to run application workload requirements wherever it makes the most sense based on their unique requirements. By placing cloud infrastructure proximate to users, data center providers can meet customer demands to mitigate latency, support data sovereignty, leverage cutting-edge technologies, and keep their remote employees connected and productive while working from anywhere.

Key Considerations for Data Center Investors, Operators, and Occupiers

It can be tempting to think about data centers in the same way one would an office or a retail space. After all, property values are largely measured by factors such as location and square footage. And the development and construction process is also much the same. But that is where the similarities end.

Among the key considerations for in-demand data centers are location (factors such as cost, resale value, access to adequate power supply, and local government incentives impact tenant sentiments), layout (designed with space optimization in mind for high-density deployments), and level of innovation (use of innovate technologies supporting ESG).

This is why commercial real estate firms—supported by network infrastructure providers—are leading the way when it comes to investing in, developing, occupying, and maintaining data center facilities. Beyond traditional services such as finding locations, negotiating transactions, and managing facilities, many CRE companies now offer solutions for optimizing data center infrastructure for cost efficiency, sustainability, 100% uptime, and more.

The Role of Network Infrastructure

The network infrastructure required for modern data centers is complex, which is why Panduit is partnering with CRE firms to provide best-in-class solutions, including:

  • Panduit SynapSense® Cooling Optimization Solution for gaining control over unpredictable environmental conditions and capacity challenges, which can reduce cooling energy consumption by up to 50% and provide actionable information for continuous optimization
  • Turnkey cooling optimization solutions for gaining control over unpredictable environmental conditions and capacity challenges, which can reduce cooling energy use up to 50%

Partnering with Panduit gives CRE leaders access to the broadest portfolio of innovative network infrastructure solutions designed to help provide reliable, consistent network performance and increase speed to market. Learn more about them by visiting our commercial real estate solutions website.

Download our solution guide, Network Infrastructure for Commercial Real Estate, to learn more about robust, reliable solutions for Commercial Real Estate environments.

This post is the fourth in our series on key trends in CRE and network infrastructure. Be sure to subscribe above for updates to stay informed.


Monte Turnage