For the next year, the horizon looks pretty dim for metro Atlanta commercial real estate developers, except for what might be one bright star — data centers.
While continued job loss, tight credit markets and reduced consumer spending have stifled development in most real estate sectors, data centers offer a different story.
As the modern corporation expands information technology capacity, it’s fueling the need for more data centers, which house thousands of servers to store information, power applications and other critical functions.
Atlanta has benefited from the trend.
In 2009, Research In Motion Ltd. (RIM), developer of the BlackBerry, confirmed a new data center in Alpharetta was under way — adding about 200 high-tech jobs.
Across the United States, even as the economy slowed, the need for data centers has continued to expand, with the number of projects growing by about 10 percent a year, according to the consulting firm McKinsey & Co.
That growth is even swifter in emerging markets such as China and India.
Firms like Carter, T5 Partners LLC (spun out of the former The Staubach Co.), CB Richard Ellis Inc. and BG Capital Solutions LLC either created teams focused on data centers or began developing the projects themselves.
“We saw a niche on the horizon,” said David Cole, principal with BG Capital Solutions. “Retail was nonexistent. Industrial came to a halt, but there has been little drop-off in demand for data centers.”
Green shoots
One giant problem with all data centers, however, is power consumption.
The cost of running data centers has been soaring by as much as 20 percent a year, according to McKinsey.
Between 2000 and 2006, the energy used to store and handle data doubled, and the average data center used as much energy as 25,000 households, according to the consulting firm.
But, even that is creating opportunities.
The need for data centers isn’t going away, so corporate America wants to develop them with fewer adverse effects on the environment.
IBM Corp. and Hitachi have launched “green” data center programs.
Mellanox Technologies Ltd., a leading supplier of semiconductor-based products for Fortune 500 companies and their data centers, is no different.
The company says the need to reduce energy, real estate, management and infrastructure costs is driving its green data center business.
The trend is local, too.
Tom Lowry, an impassioned advocate for the environment, is chief operating officer of Corus360, a technology consulting business.
In 2008, Corus360 paid about $1.2 million to purchase 130 Technology Parkway, a more than 30-year-old building in Peachtree Corners that had been vacant for eight years.
Source: Douglas Sams (2010). Data centers could boost real estate market. Atlanta Business Chronicle Published Jan 01, 2009 Viewed Jan 04, 2010, http://www.bizjournals.com/atlanta/stories/2010/01/04/focus1.html?b=1262581200%5e2659141&s=industry&i=commercial_real_estate
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