Notes from the Consultant’s Jungle

Many firms have gone looking for core/shell property with the intent of renovating these structures for use as a data center.  These projects are very capital intensive, and in many cases the benefits of having the existing structure are almost nil when viewed in the context of the broader project plan and budget.  However, many firms continue the search through available property in hopes of finding a diamond in the rough that can be resurrected as a great data center.

Through our experience in helping clients with these searches, one has to sort through dozens of duds before finding a real candidate data center property.  While many problems can be overcome with freely flowing capital, there is a short list of show stoppers that in spite of all else, there is no way to make the property fit the intended purpose.  By properly arming your commercial realtor, one can save a lot of time by weeding out the candidate properties according to the most common road blocks.  We’ll discuss those here.

The first most common show stopper is insufficient ceiling height.  If a building hasn’t been built for use as a data center in the first place, or if it is an aged retired data center facility, chances are that the ceiling is too low for contemporary data center applications.  The slab-to-slab or slab-to-joist clearance must accommodate the raised floor, the height of the cabinets, overhead ladder racking, fire suppression systems, lighting, and for some designs a return air plenum.  Your design will determine the true requirements, but if you can’t imagine a three foot raised floor and a full height cabinet with cable trays on top of it, then the clearance is much too small.  This may not be the most important show stopper, but in our experience it is the most obvious and by knowing the ceiling clearance (from your realtor) ahead of time you can save yourself the time of inspecting the site.  Determine the slab-to-slab clearance you need and give that to your realtor as a requirement.  If the ceiling is low, just walk away.

The second most common show stopper is insufficient space.  This takes several forms.  One important point to remember when you give your realtor the assignment of finding candidate properties is to include space for MEP infrastructure as well as payload space in your requirements.  Space for the MEP plant can be as large as or even larger than the prescribed payload space.  Many clients forget this point when considering property requirements.  The second important point to consider is the geometry of the space available in the building.  The rectangle is the favorite shape of the data center designer.  It’s often not the favorite shape of building architects.  We’ve seen many properties that seem to meet the total square footage requirements on paper, but in actuality are L-shaped, C-shaped, diamond-shaped, and even round.  If the shape of the space is not a nice rectangle, then one must consider the impact on the yield of the space (it’s going to be lower than with the same square footage arranged as a rectangle).  If the space is too small for MEP and growth (of both MEP and payload), or if the space is not rectangular, just walk away.

The third most common show stopper is ready access to fiber.  If the property is far from a Tier-1 backbone, one should expect significant cost and lead time to extend the backbone to the property.  Underscore the word, “significant,” in that last point.  Keep in mind though that this doesn’t mean one should consider only urban locations.  Quite the contrary, there are lots of rural locations with good proximity to Tier-1 routes.  One just has to do the homework, and this is a point that not all commercial realtors are equipped to handle for you.  Get the fiber maps.  If the property is not close to a Tier-1 backbone, just walk away.

A fourth common show stopper is a set of covenants that ultimately preclude one’s ability to operate the property as a data center.  For the properties that look good on paper, a good realtor will inspect the covenants to make sure that you can operate external generators, store diesel fuel, attach satellite antennae, erect security fences, loading docks, and the other external features that all data centers have.  If the covenants restrict the features and functionality of a data center, just walk away.

The last common show stopper we’ll mention is hazardous material or contaminants.  Most often, this is an issue for a property that was formerly some sort of industrial manufacturing facility.  The older the property, the more important it is to run this issue to ground.  Discovering hazardous material during the construction process can derail the budget and timeline, and even worse, introduce risk to the people working there.  If residual particulate material is a factor, one must consider the cost and technology needed to purify the air so that IT equipment and personnel are not impacted.  If the site contains any sort of hazardous material, just walk away.

Finally, we’ll make a point we’ve made numerous other times in other articles.  Clients find themselves in a site search for a data center building out of the desire to save money in their data center project.  In very many cases, the value of the structure on the property is not a significant cost savings for the overall project.  As a result, this exercise is seldom a good use of time.  It has a better chance of success if the data center being planned is very large.  Otherwise, it’s likely that the exercise is more trouble than it’s worth.  The recommendation instead is to look for a quality colocation provider, leveraging the provider’s expertise in mission critical facilities and the shared amortized costs of the MEP infrastructure and supporting services.  The TCO advantage of such an approach can be significant.