Adaptive Reuse: How to Select an Existing Site for Data Center Development

When it comes to selecting and building out data center space, adaptive reuse can offer more flexibility on location than new constructions. Greenfield projects require large lots of empty land that also have access to fiber and power infrastructure, and often new power infrastructure must be installed. This is why new data centers are often built in rural or suburban areas. With adaptive reuse, companies can find existing buildings in urban areas that offer low-latency connectivity in the markets they wish to serve. A site selection team that not only has deep real estate knowledge but also data center development and operations expertise can identify existing properties that work for modern data center use. Here we share some of the key requirements that RAEDEN’s site selection team considers when we are assessing properties for data center development.

Geographic Location

If location isn’t preeminently determined by user base, a site selection team can consider the likelihood of natural disasters and avoid high-risk locations in their search. Generally, it’s best to avoid areas that are at high risk for earthquakes, tornadoes, and hurricanes, unless available sites include structures that were built to withstand these possible weather events. It’s also wise to look for sites that are above FEMA’s designated 500-year floodplains and have a less than .2% chance of flooding annually.

Power

In today’s market where demand for power greatly exceeds supply, already existing stranded or latent power is a major advantage of choosing adaptive reuse. RAEDEN looks for sites with already existing power agreements that have the potential to scale up capacity over time. We conduct power studies on existing properties to understand the potential future power capacity and available energy sources. RAEDEN’s team forges agreements with utility providers to increase power capacity over time and scale power equipment as needed. In some cases, natural gas generation or alternative energy is an option, and we will design power plants on site if needed to meet customer requirements.

Connectivity

Urban areas are often ideal for data center deployments that require low-latency connectivity, such as AI inference workloads. It’s ideal to find an existing structure that already has fiber carriers on site, but locations that have fiber lines available within a half mile radius are also feasible. Carrier diversity ensures competitive pricing and lower downtime risk.

Building Specs

It’s critical to understand a building’s structure, layout, and history in addition to power, network, water, and security systems before choosing an existing site for data center development. Due diligence for adaptive reuse is a rigorous process. RAEDEN’s team walks and fully documents a site in addition to obtaining all necessary documentation from owners before moving forward on a project. One important metric to consider is ppsf, or pounds per square foot. A building must be able to support dense, heavy racks. RAEDEN’s team looks for sites with a minimum of 250 ppsf. It’s also important to consider ceiling height (a minimum of 16 feet), access to and distance from loading docks, and the site’s perimeter. Is there enough space for new power generation, cooling, or generators as needed to meet the requirements of the deployment?

Other Considerations

Some states and localities offer tax incentives for data center developments including property tax abatements, sales tax exemptions, energy credits, and job creation credits. These can have a significant financial impact on the cost of a deployment over time. Some cities may offer tax abatements for renovating vacant properties. It’s also important to consider the cost of power in different markets, as this will have a significant impact on recurring costs. The price per kilowatt-hour can vary significantly by state, from around 7 cents/kWh in North Dakota to around 29 cents/kWh in California. Community and local government support for a redevelopment project can also be helpful to ensure that the process is smooth and efficient.

Start the Search for a Site

If your company is looking for data center space and new construction options don’t meet your timeline, contact us to start the search for an existing site that meets your needs.