Donald Kohlenberger, president of Hightower Initiatives, also contributed to this piece.

The data center of yesterday - built from the ground up on a greenfield site, far from the urban enterprise it supports - is no longer the only way to meet today’s artificial intelligence (AI) and high-performance computing application needs.

More and more high-tech data centers are taking root in urban central business districts. And it’s a win-win for data center and commercial office building owners alike.

Commercial office vacancy rates run high — projections reaching 24 percent by 2026 — but can offer critical advantages data center owners and operators are looking for, including proximity, the ability to drive down latency and provide faster, more reliable access to digital operations, and, uniquely, speed to market.

The old belief that these urban locations couldn’t handle the demands of a data center is being debunked. Decades-old buildings and iconic urban structures often have significant excess power and cooling capacity due to historical advances in energy-efficient lighting and cooling plants, with the ability to expand further. And with advances in cooling and power distribution technologies, many existing buildings can now be reimagined to include state-of-the-art data centers, in a mixed-use building, equipped to handle the rigorous demands of modern digital infrastructure.

Speed to market is a critical advantage. Constructing a new facility takes years of site acquisition, permitting, and municipal entitlement, while converting an existing urban space can be measured in months. This accelerated process, achieved by repurposing the existing infrastructure, including mechanical and electrical systems, allows businesses to meet growing digital demands and capitalize on new opportunities far quicker.

In a world where speed to market can make or break an organization’s competitive edge and equate to significant financial gains or losses, the ability to transform a readily available vacant urban property into a fully operational data center within months is a game changer.

Which commercial spaces are right for data centers?

Not all assets are created equal, and some buildings may present more opportunities than others. Understanding which commercial spaces are most suitable for data centers involves not just a thorough analysis of the building’s physical attributes, but also careful consideration of lease structures and the team required to build, manage and operate the facility effectively.

Existing buildings have electrical and cooling infrastructure that is supported by local utilities. Energy allocations and electricity rates weigh heavily on the decision to use an existing building. In stark contrast to a greenfield building, your existing building comes with an immediate capability, allowing cashflow and time for the full expansion of the services.

Space analysis

To ensure that a commercial space can be effectively converted into a high-performance data center, several technical considerations regarding power, security, and infrastructure must be addressed.

Power and infrastructure adaptability: Properties with expandable mechanical and electrical rooms, available utility vaults and parking lots that could support additional generators, and mechanical equipment are significantly more adaptable. These features can reduce conversion costs and time substantially.

Power availability is another critical factor; ideally, the building should have over 5MW of power immediately available, with the capacity to expand up to 20MW. Additionally, grounding systems must be robust enough to handle new telecommunications requirements without compromising data center operations.

Security and public access: The building’s layout should be assessed for vulnerabilities, particularly public access points and windows that need securing. Ideally, the data center should occupy a fully internal space within the building. Public access areas should be distinctly separated from the data center to maintain the integrity and security of operations, alongside controlled access systems, surveillance, and strong perimeter defenses to protect against unauthorized entry including unauthorized access to equipment serving the data center (generator, fuel, cooling units, etc.).

Data room architecture considerations: Coordinating available space and floor-to-floor heights with the data, power, and cooling strategy is key. The more height, the more flexibility. The emerging cooling requirements require evolutionary steps beyond the now ubiquitous hot aisle/cold aisle configurations. Rack power densities have already increased from an average of 6.1kW per rack in 2016 to 12kW per rack today, with high-density data centers potentially drawing 70kW+ per cab.

Modern facilities increasingly rely on liquid cooling systems, typically deployed through underfloor systems. While raised floor systems are not universally required, clear height of at least 15 ft becomes critical if you consider raised floors combined with overhead power distribution, ensuring adequate space for infrastructure. Data centers should avoid spaces prone to condensation, especially those adjacent to humidified areas or exterior walls, as excessive humidity can negatively impact equipment reliability.

Mechanical infrastructure and system integration: Existing mechanical spaces should be upgradable to offer redundancy and expansion capacity, with considerations for municipal chilled water and roof space for additional cooling systems. Efficiency improvements in modern buildings often leave significant amounts of unused chillers and power, which can be repurposed for the data center, thereby optimizing resources.

Decarbonization and energy efficiency beyond the data center: In a downtown multi-use facility, data center waste heat can be directed to heat the building or even surrounding buildings. While isolated example use cases in Denmark and Dublin have been implemented, the combination of data center liquid cooling with the increasing prevalence of heat pumps makes recovering the data center heat more economically achievable than ever before.

Lease structure

A commercial space’s existing infrastructure and location should not overshadow the importance of the data center’s autonomy and ability to operate independently and efficiently. This is where the lease structure is critical; the two biggest considerations for owners and operators are metering and control of operations.

The lease should account for metering of power, water, and energy usage to ensure that the data center is on its own meter. This not only aids in operational efficiency but also allows for flexibility in energy management, such as selling excess heat back to the building owner in winter and buying it in summer. Operations clauses should specify the data center’s right to control its own equipment, as well as parameters for water quality and system integration with the base building equipment. It may even be possible to separate the mechanical and electrical systems from the base building use for ease of operational control and ownership.

The development team

A successful conversion requires a “dream team” of building consultants with extensive experience in both data centers and commercial buildings. This team should include experts in high-rise or low-rise commercial building projects, as well as a deep understanding of municipal regulations, tax credits, and the unique challenges of construction in a central business district. Think of it as taking an old car and turning it into a high-performance vehicle — careful planning and expert execution are key.

A time and cost-effective option

Reimagining urban commercial space into data centers is more than just a trend — it’s a forward-thinking approach that leverages existing assets to meet an organization’s speed-to-market need. Faced with declining office occupancy rates, urban municipalities are growing increasingly sympathetic and flexible when it comes to filling vacant commercial spaces, and utility companies are eager to strike deals, making it even more advantageous for data centers to tap into existing utility infrastructure that rural areas lack.

Ultimately, incorporating data centers into repurposed urban buildings offers a cost-effective and time-efficient solution, and an opportunity to integrate modern data operations with vibrant, multiuse environments, reinforcing both technological advancement and urban revitalization.