AI to push demand for data centers

As the “AI Revolution” starts to unfold and applications expand into various verticals, the scope of how real estate will be affected is uncertain. But the most immediate impact seen is the soaring demand for data centers, which house the computing capacity required for AI, reported CenterSquare Investment Management in its most recent commentary on the public data center sector.

The firm outlines three points that highlight the current and future merits of data center REITs:

Data centers are already 3x the size of the office sector in the REIT universe. Only 2.9 percent of the U.S. REIT investable universe is exposed to the office sector, while data centers make up 8.6 percent. Further development of AI will create more demand for data centers. Key data center tenants — Microsoft, Apple, IBM and others — will only continue investing heavily in cloud computing to keep developing AI, driving up data center demand. Data center REITs contr