Data Center Development sell above $1,000 per Sq. Ft.

Why I'm Bullish on Humankind's Cities...

Author

Dan Breslin
February 02, 2025

My loyal reader, 

I am grateful for your time this morning. I'm in Orlando at the Commercial Mastermind event I mentioned and get ready to go on stage today. Exciting.

To clear up any assumed confusion, please understand that what you find in this newsletter comes directly from my own brain. I do not hire copywriters or use AI in any way to produce the Jewels of Wisdom Newsletter. To NOT write these emails myself would be a con-job.  No thanks. I respect your time too much to violate your trust in that way. On to our discussion (which does include the topic of AI...)

Here's today's agenda:

First Time Reading?  Sign Up Here

 Doing a Deal with Diamond Equity

  • Here's What I Invest In:

    • Small Bay Industrial 20K sq. ft+

    • Industrial or Flex Warehouse 20,000 - 250,000 Sq. Ft. 

    • Industrial 8,500 Sq. Ft+ on 3+ Acres 

    • Retail Strip or Shopping Center 10,000-250,000 Sq. Ft.

    • Great Operators who are Finding & Running Great Deals

Data Center Development sells above $1,000 per Sq. Ft.

Over the past few years I've heard about Data Centers and never gave them much thought. Then, on the TreppWire Podcast (one of my top Commercial Real Estate investing information sources), I began hearing about sales at $1,000 per foot, $1,500 per foot & up. I'm no expert on Data Centers & AI, but I know enough to see a trend and learn at least enough to survive the coming wave. (Translate that last sentence to "Learn about & implement the new technology and rake cash.")

This week's REI Diamonds Show podcast, I interviewed a Chad Fowler, a data center architect. One fun fact I learned is that old technology data centers, think pre-AI, could be retrofitted into old office buildings or warehouses. Now, with the advent of liquid cooled chips, the rigs require 20-24 foot clear ceiling heights. Debunks the idea of converting old office buildings downtown... Listen here.

Why I'm Bullish on Humankind's Cities

I'm bullish on cities because a majority of humankinds technological leaps have occurred in cities through all of history. It made logical sense for trading & physical goods. Where the people are, there too is the product. 

The market forms because of the cluster. Where the people are, there is talent. Talent can then collaborate within the AI (meaning "Actual Intelligence") produced by the proximity of all of those people. It's easier to hire other talent, a doctor, a home builder, or any other service when there is an abundance of people around. So commerce & innovation thrive where many bright people are gathered. I'm bullish on cities mostly for this latter reason innovation clusters.

The city is now coming out of a slump, and I believe it has already bottomed out. The "work from home" experiment is coming to an end and I am glad that we are going to return to a culture that prizes production. 

Logistics Clusters

Logistics clusters are cities that feature locations where goods are transportedin mass. Think highways, airports, & railroads. Atlanta thrives because of its central hub location for trucking & air traffic. Chicago grew up on Lake Michigan traffic & railroads. Philadelphia grew out of the Delaware River traffic and continues to be a prime location today due to reasons including the proximity to Washington DC & New York. 

I'm bullish on industrial property located within these logistics clusters. As long as people are buying goods, there will be a need to store & ship those same goods.

For a deep dive into Logistics Clusters, I suggest reading Logistics Clusters by Yossi Sheffi.

 Well, I'm off to finish the rest of this Commercial Mastermind. Catch you next week!

Dan Breslin
President-Diamond Equity Investments
Host-The R.E.I. Diamonds Show
Broker-DEI Realty

15 Deals Closed Year to Date (259 closed in 2024)

104 Deals in Inventory, Either Under Construction or Awaiting Closing