Data Center Site Selection Criteria

"How to Evaluate a Building for Data Center Conversion" Earlier this week I shared how Chicago developers turned a $12 million office building into a $40 million data center in 15 months. Today, let's talk about what to look for. The Five Critical Factors: 1. Power Infrastructure This is the dealbreaker. Can you increase capacity to 30-50 megawatts? Existing transformers? Proximity to substations? The Chicago building had substantial electrical infrastructure from its trading floor days. Without power capacity, you don't have a deal. 2. Building Structure You need: Wide, column-free floors High ceilings for cooling Floor load capacity for server weight Cavernous layouts The Cboe building was designed for trading floors—which converts perfectly to data centers. 3. Existing Connectivity "This building is very heavily wired from its time as a trading platform," said buyer Daniel English. Look for heavy wiring, fiber proximity, and urban locations near connectivity hubs. 4. Cooling Potential CRE Daily reports liquid cooling is becoming standard as power densities jump from 120 kW per rack today to 600 kW by 2027. Can the building support liquid cooling systems and upgraded HVAC? 5. Urban Location Advantage English explained why urban conversions command premiums: "Just like Amazon last-mile delivery, data centers take less time to deliver when they're close." Low-latency applications—trading, streaming, gaming—pay premiums for urban proximity. The Best Candidates: Former trading floors, financial services buildings, telecom facilities, heavy industrial with power infrastructure. My Take: The Chicago flip proves it: The biggest returns aren't in greenfield development. They're in buying assets where someone else already solved the hard problems and the market hasn't caught up. What building in your market has these five factors? Because while everyone else sees obsolete real estate, you might be looking at a 233% return in 15 months. What are you seeing that others are missing? Sources: "Flip of former Cboe Global Markets headquarters in Chicago shows soaring data storage values" by Ryan Ori, CoStar News, October 23, 2025; "Data Centers Driving Growth In AI And Real Estate" CRE Daily, PrincipalAM research

Every billion-dollar data center begins with dirt. The land itself determines the limits of power, scale, and speed. Yet the best parcels today aren’t the cheapest they’re the ones wired for megawatts and milliseconds. A few things define who wins: • Power access: Sites within one mile of substations or transmission corridors. • Fiber connectivity: Low-latency paths to major network exchanges. • Policy alignment: Fast permitting, tax incentives, and community acceptance. Developers are now buying powered land years before construction starts. Others are co-locating next to generation hydro, gas, or nuclear to bypass grid congestion entirely. The model is shifting from single builds to multi-phase “AI corridors,” where power, fiber, and zoning are secured across entire regions. Microsoft’s 2024 Malaysia site captured this logic: a parcel beside a 500MW power plant, tied to new fiber routes, backed by state-level incentives. Data centers are no longer about square footage. They’re about control of electrons, connectivity, and permits. Whoever secures those first defines the next decade of digital infrastructure. Read the article below #datacenters

Site selection decisions made today will determine your competitiveness for the next 20 years. The old playbook focused on finding the cheapest location with enough labor. That approach no longer works. The companies getting site selection right in 2025 are asking completely different questions than they were five years ago. Power has become the primary constraint. What used to take two years or less for electrical upgrades can now take eight years for manufacturers needing 10MW or more. Data centers and factories are competing for the same limited supply, and what were once regional shortages are now nationwide. If your facility requires significant power, your timeline for becoming operational just extended by years. Talent trumps cost, every time. Chasing low-cost geographies made sense when labor was abundant everywhere. It no longer is. Talent shortages are not going away, and competition in cheap markets erodes whatever cost advantage you thought you had. Companies are now prioritizing quality of life and community appeal because that is what attracts and retains the skilled workforce advanced manufacturing requires. Sites near universities, within commuting distance of diverse talent pools, and in communities people actually want to live in are commanding premiums for a reason. Incentives will not save a bad location. Incentives have become a shiny object. They come with strict requirements, and quality sites in desirable areas that meet those requirements are scarce. Too many companies have learned the hard way that eligible properties often do not match what they actually need operationally. Incentives should be treated as an extra benefit, not the primary decision driver. Brownfield is no longer the default. For years, companies favored refurbished facilities for speed and to comply with federal initiatives. Most viable brownfield sites have now been picked over, and refurbishing what remains is often more expensive than building new on greenfield sites. First-generation industrial facilities with a clear pathway to power, or ground-up development on industrial-zoned land, are becoming the smarter play. The real shift: strategic value over short-term savings. The cost of getting this wrong is not just financial. It shows up in your ability to recruit talent, scale operations, adapt to market changes, and stay competitive as technology evolves. A location that saves money upfront but cannot attract the engineers and technicians you need is not a bargain. Site selection used to be a real estate decision. Now it is a business strategy decision that requires understanding workforce dynamics, infrastructure timelines, community alignment, and long-term operational flexibility. If your organization is evaluating a new facility or expansion, the questions worth asking are no longer just about cost per square foot. They are about whether this location positions you to compete, adapt, and grow for the next two decades.

We're actively negotiating on several data center sites—200MW+ greenfield and brownfield projects, a site ready for new construction, and multiple edge portfolios. The due diligence has been a masterclass. Data center investing isn't real estate anymore. It's a hybrid of real estate, energy, and technology. And if you're a lifelong learner, this is one of the most fascinating spaces to be in right now. -The Basics Everyone Knows- You need land. You need power, fiber, and water. That's the easy part. What qualifies that land is where it gets complex. -Power- It's not just "do you have power?" It's: • What type of power—grid, renewable, on-site generation? • How many redundant sources are available? • What's the timeline to energize—months or years? • What's the cost per MW, and how does it escalate? • Can you secure a PPA that makes the economics work? -Fiber- • How many points of connectivity do you have? • How close is your nearest point of presence (POP)? • Are there dark fiber lines available to light up? • What's the latency to major cloud on-ramps? -Water- • What's the source—municipal, well, reclaimed? • Is it sustainable at scale? • Will local stakeholders oppose the usage? • What are the cooling alternatives if water becomes constrained? Each of these has layers underneath. And that's before you get into the technical due diligence. -Where It Gets Interesting- Once you understand the fundamentals, a whole new world opens up. Alternative power sources—nuclear, SMRs, behind-the-meter solar. Equipment sourcing and lead times for transformers and switchgear. Understanding the energy draw from AI workloads versus traditional compute. The difference between training clusters and inference at the edge. Then there's the structuring: PPAs, offtake agreements, utility negotiations, local stakeholder alignment, tax incentives, and creative financing that makes projects pencil. -Why This Matters- The operators who win in this space won't just be real estate people. They'll be the ones who understand energy markets, technology roadmaps, and how to structure deals that work for utilities, communities, and capital partners simultaneously. Data centers reward curiosity. The more you learn, the more creative you can get—and the better the opportunities you can unlock. We're deep in this right now. It's been one of the steepest learning curves we've taken on, and one of the most rewarding. Who else is navigating the complexity of data center development?

Is your Data Center Baking Clay? Should you be worried about the ground under your data centers feet? I want to highlight the work Mara Zwicker at Substrata has done in visualizing a risk that most of the industry treats as a rounding error. She modeled five real-world sites to see how 100 MW of high-density AI infrastructure interacts with specific geological profiles over two decades. The modeling suggests that our standard approach to site selection often relies on treating the ground effectively as an infinite thermal sink. While this holds for legacy densities, that assumption can break as we move toward concentrated liquid-to-chip architectures with much higher densities combined with BESS solutions etc. In the world of regenerative infrastructure, we have to stop viewing the ground as just a static platform for weight. If you are building for a 30 year horizon, that soil is a thermal battery. Ignoring the "Ground Heat Bulb" doesn't lead to immediate failure, but it introduces long-term friction, with potential MEP misalignment and structural subsidence that cannot be fixed after the fact. Reliability starts at the bedrock, if the local geology can’t disperse the thermal stress of your specific cooling architecture, you aren't managing a Tier III+ facility. Instead, you’re managing an asset where the long-term structural behavior is not understood. This isn't a universal threat, it is highly site-dependent. Granular soils with high conductivity disperse heat effectively, while organic clays or volcanic ash can trap it, leading to the gradual consolidation that threatens high-voltage feeds and coolant piping. Sovereign power requires us to protect the literal foundation of our infrastructure by moving beyond simple weight-bearing capacity to include how that ground behaves thermally over time. It’s ironic that while we build for 24 month GPU cycles we need to potentially consider ground risks that might manifest over 10-30 years. If you'd like to follow Mara's work please visit her here: https://lnkd.in/gu3ZF4CV iMasons Climate Accord Nomad Futurist International Data Center Authority (IDCA) Data Center-Dynamics Adam Knobloch George Rockett Ron Vokoun Jack Pouchet Mui Hoon POH, FSID FSCS FHKIoD Eugene S. Sureel Choksi Harqs Singh Michalis Grigoratos Chris Petersen Rowan Peck John Wallerich Denise Holt Matt Evans James Betts Caterina Giacomelli Andy Hastings MIET Andrew Dewing Adam Kramer w.media Bisnow Rich Miller

Most people are talking about data centers. Our team at Midwest CRE Advisors is actually working them. There are two ways I'm engaged in the Kansas City data center market right now and they couldn't be more different. 1️⃣ Greenfield Sites & the Power Problem Finding raw land for a data center in KC isn't the hard part. The hard part is the utility conversation. How close are you to a substation? What's the available load? What does the interconnection timeline look like with Evergy? Can the site support 20 MW, 50 MW, 75 MW+? Kansas City recently rezoned data centers as industrial facilities, which matters for site selection. But even with the right zoning, the wrong power situation kills a deal before it starts. I'm working with landowners right now who have sites that look ideal on paper, highway access, industrial zoning, right-sized acreage, and my job is to run the utility scenario before anyone wastes time or money. Evergy's pipeline is already over 15 GW in active agreements. The sites that can plug in fast are worth a premium. The ones that can't? You better know that before you buy. 2️⃣ Conversions & Modular Not every data center gets built from the ground up. I'm also engaged on the conversion side, existing industrial and flex buildings that have the bones to become edge or modular data center deployments. Floor load. Clear height. Power access. Fiber proximity. Cooling options. The modular data center market is projected to grow at 17.7% CAGR and a lot of that growth isn't in brand-new hyperscale campuses. It's in adaptive reuse and modular deployments that can be stood up faster, closer to the edge, at lower capital cost. Kansas City's central geography, affordable power rates, and available industrial inventory make it one of the better-positioned markets in the country for this type of deployment. If you have land, a building, or capital that belongs in this conversation, reach out. This market is moving fast and the window for early positioning is closing. 📍 Kansas City

Every trillion-dollar data centre starts with one decision: location. Pick it right, and you build efficiency. Pick it wrong, and you burn millions. It’s not just about buying land and plugging in power. It’s about planting it in the right ecosystem where cooling, energy, and connectivity align from day one. Why does location matter? Because every site decision has a long tail. A poor choice means higher energy bills, shorter equipment life, and constant operational firefighting. A good one means lower costs, stable uptime, and better long-term returns. In this space, geography is engineering strategy. How do the pros decide? They start with fundamentals: - Climate and cooling efficiency - Access to renewables - Connectivity and latency paths - Land cost and expansion potential These aren’t just numbers on a sheet. They shape how a facility performs over decades. Urban or rural? - Urban sites offer dense connectivity, but at a premium. - Rural locations offer space and scalability, but longer fiber routes. - The best hyperscalers aim for the middle ground, close to fiber and away from congestion. Top hyperscale hubs today: 1. Northern Virginia – unmatched network density 2. The Dalles, Oregon – powered by clean hydro 3. Hamina, Finland – pioneering seawater cooling 4. Frankfurt – Europe’s digital core 5. Singapore – Asia’s gateway to global data My top three picks for future builds: - Northern Virginia. - The Dalles. - Hamina. Each offers the right mix of power, efficiency, and resilience for the next wave of AI-driven demand. Data centres aren’t just metal and servers. They’re part of the world’s nervous system, carrying every digital signal we depend on. Choosing where to build them isn’t a project decision. It’s a legacy one. P.S. If you could plant a data centre anywhere in the world, where would it be and why?

THE BIGGEST RISK IN DATA CENTERS ISN’T POWER. IT’S LOCATION. For years, site selection followed a familiar playbook: • Cheap land • Tax incentives • Access to power • Fiber proximity That was enough. Not anymore. ⸻ THE IRAN WAR EXPOSED A CRITICAL FLAW: We’ve been building data centers in geopolitically unstable regions… Assuming redundancy would save us. It won’t. ⸻ LOCATION IS NOW A TIER 0 DESIGN CRITERIA. Not Tier I. Not Tier II. Tier 0. Because no amount of redundancy inside the building can fix: • Regional conflict • Airspace restrictions • Fiber chokepoints • Sanctions and supply chain shutdowns ⸻ LET’S BE CLEAR: A perfectly designed Tier IV facility in the wrong location… is a single point of failure. ⸻ WHAT HYPERSCALERS ARE STARTING TO REALIZE: The future isn’t just bigger campuses. It’s smarter geographic distribution. ⸻ EXPECT A SHIFT TOWARD: • Politically stable regions over low-cost regions • Distributed edge + regional clusters over mega concentration • Multi-country redundancy (not just multi-AZ) • “Safe zone” infrastructure strategy ⸻ THIS CHANGES EVERYTHING: • Site selection strategy • Capital allocation • Risk modeling • Commissioning scope ⸻ COMMISSIONING WILL EVOLVE TOO. It won’t just be: “Does the system work?” It becomes: “Does the system survive where it’s built?” ⸻ THE REAL QUESTION ISN’T: How efficient is your data center? ⸻ IT’S: Will it still be online when the region isn’t? ⸻ #DataCenters #AIInfrastructure #SiteSelection #MissionCritical #Commissioning #Hyperscale #DigitalInfrastructure #RiskManagement #Cloud #Energy

Most people think data center site selection is about proximity to fiber and population centers. That was true 5 years ago. It's not true anymore. Here's what actually matters now: Power availability. Full stop. We've walked away from sites with perfect fiber, perfect location, perfect everything. Because the utility couldn't deliver power in a reasonable timeline. And we've pursued sites in the middle of nowhere. Because the utility had capacity and could move fast. The math has completely flipped. Proximity to end users matters less when you can build fiber. Proximity to talent matters less when you can operate remotely. Proximity to power generation matters more than anything else. Here's what we look for now: Utilities with excess generation capacity or clear path to new generation (Hint: Sometimes you have to create your own path). Regions with natural gas pipeline infrastructure already in place. Sites near existing substations with available capacity. Regulatory environments that move fast on interconnection approvals. Everything else is secondary. The crazy thing is: This is creating opportunities in places nobody's looking. While everyone's fighting over Northern Virginia and Silicon Valley, there are regions with abundant power that nobody's paying attention to. The data center map is about to get redrawn. And it's going to be drawn by power availability, not proximity to users. *Here's a picture of my favorite beach for those in colder climates 😊 *

Microsoft and Google just rewrote the map for data centre growth. The next chapter starts now. Let’s break it down 👇 → Microsoft: 55 MW, all-renewable, new cloud region in Sweden (that’s five in the Nordics!). Powered by wind and hydro, built for AI, connected with fiber and subsea cables. Fast, green, and built for low-latency workloads. → Google: 150 MW hyperscale campus in Chile, using solar and geothermal. The goal? 60% renewables by 2035. This site will drive local jobs, fuel AI, and unlock a new digital backbone for South America. But here’s the real headline: Hyperscaler CapEx will almost DOUBLE in two years. → $170B (2024) → $320B (2026) Let that sink in! Why the surge? Three forces: 1️⃣ AI is exploding-training and inference need more power, everywhere. 2️⃣ Data sovereignty-regulations demand regional builds. 3️⃣ Sustainability-green certification is now a must-have. What’s changed? The old way: Centralised mega-cities with “cheap land.” The new way: Go where clean power, fast networks, and local laws align. Here’s what I’m seeing on the ground: → Every site selection starts with power-how green? How reliable? → Latency matters-close to users, close to the edge. → Policy is king-compliance first, not an afterthought. For companies looking to scale: • Pick sites with renewable energy as a priority. Power = competitive edge. • Build for low latency and local rules. It pays off later. • Watch where the hyperscalers invest. The ecosystem follows. Microsoft in Sweden. Google in Chile. These are not one-offs. They’re signals for the whole industry. The new geography of hyperscale is about green power, distributed sites, and AI at the core. Where do you see the biggest shift-energy, policy, or connectivity? Share how you’re navigating the new map.