Data Centers Meeting the Digital Demand

REIT magazine: September/October 2019

Between the constant access to information via our wireless phones and devices, the proliferation of streaming media, and the abundance of smart-home technology, the amount of data consumed daily continues to grow exponentially. The job of storing, securing, processing, and providing access to that information often falls on data centers owned by REITs. These data centers house the servers and network equipment that support modern communications and the internet-of-things.

Data centers provide the real estate to house a highly reliable, secure environment for communications and data, including cooling and electrical power systems as well as backup generators and redundant systems to protect networks in the event of flooding, hurricanes, or other disasters. Systems are scalable to accommodate any size user, with connections to other users inside the same data center, elsewhere in the United States, across the globe or in the cloud.

Data centers are implementing sustainable strategies with green building certifications, energy efficient lighting and operations, and use of clean and renewable power sources.

Data centers are one of the most rapidly growing of all REIT sectors. Total funds from operations (FFO) of data center REITs topped $1 billion for the first time in the first quarter of 2019, just four years after it first reached $500 million in the first quarter of 2015.