Big changes predicted for commercial real estate
[{"id": "deqfpsp", "text": "Industrial might require fewer people, but the increase in internet sales could lead to demand in logistical property. Anyone have any good sources analyzing that specific property type?", "replies": [{"id": "dequux0", "text": "I've been contemplating this same thing. Trying to figure out what the best way to analyze this as well. ", "replies": [], "depth": 2}, {"id": "des9hwf", "text": "Costar had a white paper a couple weeks ago about it. They filtered all warehouse properties within a certain size, and calculated the total population within a certain drive time. They took the 90th percentile within each metro and labeled them as last mile and then made some price and fundamentals series from that data set.", "replies": [], "depth": 2}], "depth": 1}, {"id": "deqmdy4", "text": "He said he said lee said he said lee said he said.  ", "replies": [], "depth": 1}, {"id": "der21bx", "text": "A big demand in property is gonna be/already being seen in the data center space.\n\nIn the US: As more and more companies put their services into the cloud and as companies like facebook push for video. Expect there to be a lot of construction continuing in the metro DC, metro Dallas, and metro silicon valley/santa clara areas\n\nGlobally: Because of compliance reasons. Data can no longer cross country borders so companies are being to separate their IT in those countries from their mega data centers. Expect Co-Lo providers to keep pushing for construction in europe and asia", "replies": [{"id": "der6c8z", "text": "But as technology continues to progress, Wont these data centers need less and less space for more data?  Think of how much flash drive storage has progressed in the past 5-10 years.\n\nI would want to be holding a package of data centers when they figure out how to put it all on the pin of a needle\n\n", "replies": [{"id": "der6z1b", "text": "I would have thought that as well, but you're assuming that the size of the data is staying the same.\n\nWe are moving from pictures to videos to 3D virtual reality\n\nWe are moving from automatically deleting inactive content to storing it indefinitely.\n\nWe are moving from getting user inputed information to scrapping data from various sources to communicating with other services\n\nWe are moving from creating applications that do calculations based on what we code to applications that learn how to make their own calculations\n\nThe list goes on and on, with every business having their own needs, but the point is big data is huge and will continue to grow indefinitely, while physically, a computer chip and storage device can only get so small. I software is currently outpacing hardware in technological advancements so the demand is there.\n\nA website I use is datacenterhawk, they are basically the trulia for data center colocations and always blog about where a new co-locations are being built. For on premise, company owned sites, a lot of that is private but it pops up form time to time in datacenterdynamics", "replies": [{"id": "der7jdc", "text": "These are very good points and I appreciate the response.\n\nI am not very sophisticated in data or really anything technologically.  I guess my feel, backed up by absolutely nothing, is that technology is moving so quickly all over the place.  Data/Data center is a space that could rapidly change and might require the landlord to continue changing through cap ex.  \n\nYou obviously know a ton more about this than I do.  I would just fear having to constantly upgrade or change my center.\n\nFor that reason, I like warehouse.  Physical goods will always need space.  The space needed can also be minimized through logistical advances and autonomous driving.  However, much less upfront investment is needed and might reduce risk or allow you to change as technology changes.  \n\n", "replies": [{"id": "derb3oe", "text": "Thanks, I appreciate your response and perspective as well!\n\nI tend to agree that I would rather invest my own money in something like a warehouse, mainly because it's way easier. It's just a big shell and yes would be way less upfront investment....but you can think of a data center as just a big warehouse for IT equipment! If you're a big company and have an entire support staff then it is much more lucrative to be in the data center business, but it requires a lot of work.\n\nI want to give you some more information on 1 thing you said though:\n\n&gt;Data/Data center is a space that could rapidly change and might require the landlord to continue changing through cap ex.\n\nThere are lot of different leases available but the two main options are:\n\n1. As a tenant, you don't own anything, including the IT equipment. This is called the cloud where you just remotely upload your data...this is what google, microsoft, amazon are doing\n\n2. As a tenant you don't own anything until you get to your IT cage. All you are doing is leasing some square footage inside a cage, you bring your own IT equipment, you cable between your own IT racks, etc.\n\nIn scenario 1, google has all their capex, opex, networking, software costs all optimized for each other, and baked into the cost you pay to utilize that space\n\nIn scenario 2 (which is what you be as a landlord), you need to pay for power distribution equipment upgrades as density of IT equipment increases.....if you increase power then you will need to increase cooling...you need to pay for outside telecom carriers to allow data inside and outside of the data center but that, along with security and fire detection/suppression wont really change. IT equipment isn't your problem as stated earlier.\n\nSo what data center co-locations providers do is get a big company who needs the space commit to be the anchor tenant in a newer, denser, build out. Then the old data centers get leased out to smaller companies that use older equipment. Eventually the building either gets sold or upgraded in phases\n\n\nSorry I was rambling....but that's basically why I stick to data center REITs like Equinix, Digital Realty, Core Site, QTS, etc", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "dfdp7ej", "text": "At least in my market were not seeing much demand from data centers or telecoms.  I currently represent a hi-tech/flex park that sits on heavy IT infrastructure and I have a couple former data center spaces available which are in essentially turnkey condition with heavy power, liebert cooling units and generators already in place.  In my experience there a few companies out there looking for this space.  Actually the reason I have these vacant is because the previous tenants downsized and consolidated their operations.  ", "replies": [{"id": "dfe4fe1", "text": "The hot markets right now are Dallas TX, Ashburn Virginia, Santa Clara CA, and Sacremento, CA...NYC/NJ has significantly cooled down.\n\nNot sure about where you are though", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "der94b7", "text": "I think this ignores trends on a smaller scale. Most downtown office vacancies are very low, even if the overall office sales are down. Millennials are still moving into downtown areas and there will be a shift from suburban office parks to urban ones.", "replies": [], "depth": 1}, {"id": "det6e2o", "text": "I agree with you Golden. The demands will certainly be in Data Centers as well as Ware House and Storage Facilities and of course vacant land for development opportunities across the board. A lot of  properties (at least what I see here in NY) are predominantly being converted from old and worn out commercial properties to high end residential properties. I just hope they all go Solar and no longer run on oil or gas. ", "replies": [], "depth": 1}]