Panattoni Is Latest Industrial Giant To Move Into Data Centers
The artificial intelligence industry’s growth is adding to new demand for data centers, catching the attention of more industrial developers as vacancy rises in their sector of the real estate industry.
Panattoni Development is looking to start developing data centers, the firm announced Thursday. The developer is seeking to capitalize on the real estate demand coming from companies seeking data center space for machine learning tech, generative AI and cloud computing, The Wall Street Journal reported.
The Irvine, California-based company plans to develop a gigawatt of data center capacity over the next five years, which is enough to power roughly 876,000 homes.
“You want to be where the customer is, and right now the customer wants to be in the data center world,” Doug Roberts, president of Panattoni’s North American development group, told the WSJ.
The firm plans to build data centers on land it already owns, in addition to purchasing new properties. Its data centers will be sized for a capacity of between 100 and 500 megawatts per building.
Panattoni is hiring Adam Kramer to lead the data center team. Kramer’s previous roles include CEO of nZero, a carbon emissions management company, as well as executive vice president of strategy at tech infrastructure provider Switch.
Panattoni has developed 625M SF of commercial space across the U.S., ranging from industrial to office and retail. It operates from 21 locations across the U.S., according to its website, and has tenants including Amazon, Best Buy and Unilever.
The company is following similar moves from other industrial developers in the U.S.
Prologis is planning on spending between $7B and $8B to launch its own data center business. The company, which is the most valuable REIT in the U.S. with a market capitalization of $112.7B, will focus its nascent data center business on energy procurement, production and storage, Bisnow reported last week.
Seefried Industrial Properties, which has developed more than 200M SF of industrial space over the past 40 years, is also making its own push into data centers. Outgoing CEO Ferdinand Seefried told Bisnow data centers “will keep a bunch of developers busy” in the coming decade, adding that for industrial builders to learn how to build them “is not such a dramatic thing.”
Demand is proving strong. Companies leased almost 3 GW of data center capacity in North America during the first half of the year, more than double the 1.4 GW leased in the same period last year, the WSJ reported.
