Technological obsolescence and demand drivers for data centers

There are certain considerations that investors should consider when investing in data centers: lease structures, the illusion of smaller devices and data usage.

“One of the most common question I get from investors and managers about data centers is about technological obsolescence,” says Sam Bendix, managing director, investor relations at National Real Estate Advisors. “People, of course, buy their iPhones and Androids and then the next day they become obsolete. So of course they think an asset like data centers, that is very reliant on technology, would suffer from technological obsolescence.”

Bendix continues to explain that if step back and look at data centers, particularly noting what the landlord is responsible for versus the tenant, the landlord is responsible for the heating, ventilation, the power, connectivity, the shell itself and security.

“The tenant at the end of the day is really responsible for the server infrastructure,” says Bend