In suburbs around the country, data centers have become a point of contention. But for downtown leaders struggling to fill empty buildings, they could provide a welcome source of new tenants and a boost in property values.
Downtown data centers are much smaller than centers being pitched or built in the suburbs. But they command the sort of rental rates typically seen only in high-end office space.
In addition to rebuilding downtown tax bases, data centers could also bring people back downtown.
Development consultant Don Kohlenberger calls it the ‘wedding cake’ model. Data centers in basements or on ground floors would provide lenders with confidence and developers with enough cash flow to be patient in filling vacant office space or converting upper floors to residential.
A case study of the impact of one downtown data center appears in the June issue of Downtown Idea Exchange newsletter.
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