What Type of Real Estate Are Data Centers?


Larry Thompson

Data centers are a crucial part of our modern society, playing a vital role in storing and processing massive amounts of data. But have you ever wondered what type of real estate data centers fall under? Let’s dive into this topic and explore the fascinating world of data center real estate.

What is a Data Center?

Before we discuss the classification of data centers as real estate, let’s first understand what a data center actually is. In simple terms, a data center is a facility that houses computer systems and related components such as servers, storage systems, networking equipment, and more.

Data centers are designed to provide an environment with controlled temperature, humidity, power supply, and security to ensure optimal performance and reliability for the stored data and the systems running within them.

Data Centers and Real Estate

Now that we have a basic understanding of what data centers are, let’s explore the classification of data centers as real estate. Data centers can be considered a specialized type of commercial real estate due to their unique characteristics.


One important factor that determines the value of any real estate property is its location. The same holds true for data centers.

The location of a data center plays a crucial role in its operational efficiency. Factors such as proximity to network infrastructure, access to reliable power sources, connectivity options, and even natural disaster risks are taken into consideration when choosing the location for a data center.

Design and Construction

Data centers require specialized design and construction techniques to meet their unique requirements. These facilities need to be equipped with adequate power supply systems, cooling infrastructure, fire suppression mechanisms, backup generators, redundant network connections, physical security measures like biometric access controls and surveillance systems – just to name a few.

The construction of data centers often involves significant investment due to the need for advanced infrastructure and specialized equipment. These factors contribute to the classification of data centers as real estate properties.

Ownership and Leasing

Data centers can be owned and operated by various entities, including technology companies, service providers, or real estate investment firms. Some organizations prefer to build and own their data centers, while others choose to lease space within multi-tenant data center facilities.

Similar to traditional real estate, leasing agreements in the data center industry can vary in terms of duration, pricing models, and included services. The ownership and leasing options further solidify the classification of data centers as a distinct type of real estate.


Data centers are indeed a unique type of commercial real estate that requires specialized design, construction, and location considerations. The critical role they play in our digital world makes them an essential component of modern society.

Next time you pass by a seemingly ordinary building, remember that it might be a highly sophisticated data center silently powering the digital services we rely on every day.

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