How to assess a property’s data center potential

AI has moved past the hype cycle into sustained, structural demand, supercharging an already hot market and driving data center demand to new heights. With vacancy in colocation data centers at a record low of 1% in the United States, developers are urgently seeking land and power to build new facilities.

Naturally, the tight market has many real estate owners wondering if their old industrial site, extra office space or legacy data center could have value for data center development or redevelopment.

In this article, experts from our data center solutions team offer tips for assessing your property’s potential as a data center and answer key questions: What is included in a data center site assessment? Why is it important? How do you conduct it? What are the key factors to evaluate in a data center location? How long does a data center site assessment typically take?

While data centers have basic acreage requirements like all property types, the number that truly matters is power capacity. New data center developments regularly require 100 megawatts (MW) or more, according to our latest Power Moves guide. A thorough data center site assessment explicitly evaluates how much power does a data center need at full build-out and whether step-in "bridge" power can be secured while transmission upgrades are delivered.

Rack density is climbing fast, tightening the squeeze on available infrastructure. A typical rack today draws around 20 kW, but AI and GPU-heavy deployments are already running north of 100 kW, with some operators planning for 150 to 200 kW per rack as next-generation chips arrive. Data centers built for AI require even more scale—hyperscalers are building facilities with more than 1 gigawatt (GW) of capacity, requiring 500 to 800 acres of land and multiple on-site power substations.

At the same time, rising rental rates and limited availability are prompting some enterprises to own and operate their own smaller data centers. "It's not as common, but there are still a fair number of companies looking to build their own bespoke data centers, typically between five and 10 MW," says Peter Skae, Managing Director, Data Center Technical Services, JLL. "These smaller sites aren't built for running AI models, but more for legacy applications."

A site equipped for 5-10 MW can have value for an enterprise user or an edge data center in a core market. As you move further out from city centers, developers would like to build large campuses at scale, according to Andy Cvengros, Executive Managing Director, Co-Lead Data Center Solutions, JLL.

"If you're in the outer suburbs of a major market like Chicago, a developer may look at a site with 5–10 MW of bridge power, but that's just the initial power needed for construction and time until transmission power is delivered," says Cvengros. "Ultimately, they want 200-300 MW, so they need to know what's available at the utility substation level to get up to the full load." This is exactly the kind of phased power question a site assessment is built to answer.

Rural sites further from major cities are attracting interest for AI data centers, but they need to be able to support 500 MW to 1 GW of power, says Cvengros. Conducting a load study to see what's possible or even a load commitment from the utility will be necessary to attract operators and hyperscale users.

A comprehensive assessment typically covers utility capacity and timing, fiber diversity and latency, site geology and environmental conditions, entitlements and zoning, incentives, transportation access, risk buffers and detailed data center land requirements such as acreage for buildings, yards, chillers and substations.

A data center site assessment de-risks capital deployment, validates data center site selection criteria and aligns stakeholders on schedule and cost. Without this upfront diligence, owners risk pursuing sites that can't deliver the power, connectivity or approvals needed to attract operators.

Teams coordinate with the utility for load studies and interconnection queues, map fiber routes and providers, run hazard screenings (floodplain, seismic, industrial adjacencies), test soils, review permits and model phased power delivery against construction timelines. This multi-disciplinary approach makes sure all critical factors are evaluated before making investment decisions.

A preliminary screen can be done in two to four weeks, while a full assessment with utility confirmations and due diligence often takes 8–12 weeks depending on agency and utility response times.

With these base requirements in mind, the following are some expert tips for assessing whether you can monetize power capacity in various property types.

On the surface, many retired manufacturing facilities, power plants, steel mills and other industrial sites look ideal for data center development. These sites may have plentiful land and infrastructure to support 50 MW or more. However, this type of adaptive reuse calls for a more nuanced look through a data center site assessment, focused on environmental liabilities and whether the site can actually support the use.

The land may require expensive remediation depending on the site’s prior use. Cvengros also recommends evaluating other factors, such as the number of fiber providers and type of fiber in the area. Developers and Users require three to four redundant providers fed by redundant paths.

“Most importantly, it is vital to have an agreement with the utility to supply your site with power. Just because the infrastructure is there doesn’t mean the utility can provide it,” he cautions. Determining early what a site actually needs versus what the utility can deliver is essential.

Additionally, data center sites need to be away from potential locational risks. If the site is located in a floodplain, at the end of an airport runway, next to train tracks traveled by high-speed trains or near chemical plants with combustible materials, it likely won’t work due to the mission critical aspect of these facilities.

Many companies no longer need their entire data center after migrating some applications to the cloud. There are a few options to consider in these instances. Some companies sell the facility outright and vacate the premises. Others lease out the available capacity or do a sale-leaseback transaction with a colocation provider.

If you face this situation, you’ll need to assess whether the facility meets modern requirements. “Data centers built in the early 2000s are coming to the end of their life,” says Cvengros. “They are no longer efficient by today’s standards and likely will require significant capital upgrades.”

Skae agrees, noting that the power infrastructure on such a site is more valuable than the data center itself. He remembers a transaction in which a colocation company bought a former telecom headquarters building because it had a 40 MW substation on site with approval from the utility to go up to 80 MW.

“In that case, the data center was actually a hindrance. The first thing they did was tear it down,” says Skae. Here, a data center site assessment identifies value in interconnection rights and substation capacity, and confirms the site can support what future redevelopment would need.

Office building owners may consider data centers as they brainstorm new uses for an underutilized property, but it’s often not worth exploring.

“The typical office building doesn’t have tall enough ceilings for server cabinets, and the HVAC system can’t keep up with a data center’s cooling needs. The land is likely worth more than the building to a data center developer,” says Cvengros. AI Infrastructure raises the bar further, requiring high-density electrical distribution, liquid-cooling systems, greater equipment loads in tighter footprints and substantial space for supporting critical infrastructure. In core markets where underutilized office properties are located near available power and fiber, redevelopment may offer a more viable path than converting existing structures.

If your site checks all the boxes as a possible location for a new data center, it might be time to bring in a real estate partner. Our data center team comprises experts across the country who can provide a detailed data center site assessment aligned to your goals and timeline, ensuring your plan meets the power, land and connectivity requirements your site actually has.

Contact us today to discuss your site’s potential.