The traditional approach to data center construction has focused on building entirely new facilities, purposefully designed to optimize power usage and air conditioning efficiency. However, an intriguing alternative has emerged: repurposing old, abandoned structures to give them a modern, functional purpose.
Commercial property owners ranging from private property owners, investment companies, and government agencies have a unique opportunity to repurpose their vacant buildings by leasing or selling them to data center operators. With the increasing demand for digital infrastructure, urban data centers are becoming highly sought after due to their proximity to businesses and end-users in cities. By listing their vacant or surplus buildings for lease or for sale on LandGate's platform, commercial property owners can present their property to a wide network of top tech companies and data center developers actively seeking suitable properties for new data center facilities to receive offers, all at no cost.
Utilizing Vacant Commercial Properties for Data Centers
With office occupancy rates still lagging behind pre-pandemic levels, commercial real estate owners and managers face growing pressure to think creatively and uncover new revenue streams. One compelling opportunity lies in repurposing these properties as data centers. In recent years, a rising number of vacant commercial spaces—ranging from empty office buildings to abandoned malls—have been transformed into thriving hubs for data storage and processing. This innovative approach breathes new life into underutilized properties while addressing the increasing demand for digital infrastructure. Two notable examples of vacant buildings that were repurposed for data centers include the Michigan Steelcase Pyramid and the former Chicago Sun-Times Printing Facility.
Michigan Steelcase Pyramid Data Center
The iconic Steelcase Pyramid in Michigan, originally built in 1989 as a prestigious research hub for the Steelcase office equipment company, has undergone a remarkable transformation. After being sold in 2010, it was acquired by Switch and repurposed into a state-of-the-art data center in January 2017. Founded in 2000, Switch, now owned by DigitalBridge, operates expansive 'Prime' data center campuses in key locations such as Austin, Texas; Reno, Las Vegas; Grand Rapids, Michigan; and Atlanta, Georgia. In November 2024, the company announced the third major expansion of the data center.
Former Chicago Sun-Times Printing Facility Data Center
One of the most notable transformations of a vacant building into a data center is the former Sun-Times printing facility in downtown Chicago, abandoned in 2011. In 2014, QTS Realty Trust undertook the ambitious project of converting this facility into a state-of-the-art data center. Strategically located near Chicago’s bustling downtown corridor, the site is perfectly positioned to support the region’s key industries, including financial services, healthcare, technology, and consumer goods.
Advantages of Using Vacant Buildings for Data Centers
Repurposing vacant buildings into data centers is an innovative solution that maximizes the use of existing structures while addressing the growing demand for digital infrastructure. This approach not only reduces construction costs and minimizes environmental impact but also revitalizes unused spaces, giving them a new purpose in the modern technological landscape.
Limited Availability of Affordable Land: The rapid growth of the data center industry has led to increased competition for land in prime locations. Land is in high demand in data center hot spots like Northern Virginia, Dallas, Phoenix, and Silicon Valley. This demand has significantly driven up real estate prices, making it challenging for data center developers to secure affordable land for new construction projects.Â
Cost Savings:Â Beyond land prices, the preparation and development of new sites often require substantial investment in infrastructure, such as power, cooling, and network connectivity. These additional costs further strain budgets, making the acquisition of vacant land an increasingly expensive proposition for developers.Â
Existing Infrastructure Advantage:Â Converting an old building into a data center means that there is already existing infrastructure in place. Many vacant buildings come equipped with essential power and fiber connections, making them highly attractive for data center development. This includes electricity, water, sewage, and heating and cooling systems. These systems can be upgraded to meet modern data center requirements without having to build them from scratch. In contrast, installing these utilities on undeveloped land can be both expensive and time-consuming.
Faster Time-to-Market:Â Building a new data center from the ground up can take years, whereas converting an existing building can take significantly less time due to the availability of infrastructure and the ability to repurpose existing space.
Sustainable Reuse:Â By reusing existing structures, data center developers can reduce construction waste and minimize the environmental impact of building new facilities. This approach aligns with the industry's growing focus on sustainability and responsible resource management.
Community Impact:Â Vacant buildings are often considered eyesores within their communities, detracting from the overall aesthetic appeal and local property values. By converting these properties into modern data centers, they can revitalize the surrounding area, creating job opportunities and potentially increasing property values.
Leasing Vacant Commercial Properties for Data Centers
For commercial property owners and government agencies with vacant buildings, turning these spaces into data centers offers a compelling opportunity. It transforms unused assets into revenue-generating properties, providing a steady stream of income and potentially increasing the property’s overall value.
Office building owners can partner with third-party operators to transform vacant spaces into data centers, transferring the costs of construction and operations to the operator. Through this arrangement, property owners enjoy steady rental income and may even earn a share of the data center’s revenue. This model is akin to landlords receiving a percentage of a restaurant’s sales once certain revenue milestones are reached. Such partnerships present a win-win opportunity: building owners secure dependable income streams, while operators gain prime locations for their data center operations. However, achieving a mutually beneficial agreement requires thoughtful negotiation to ensure fairness and profitability for both sides.
If you're interested in leasing your land or vacant building for a data center, you can list your property for lease for free on LandGate's marketplace. Top tech companies and data center developers use LandGate's platform to identify suitable sites and contact interested property owners with offers. Learn more and create a free listing today:
