Doug Roberts, president of Panattoni’s North American development group, followed the example of Prologis, the world’s largest operator of industrial real estate, and said: “You want to be where the customer is, and right now the customer wants to be present in the data center world.”
Hamid Moghadam, CEO of Prologis, underlined this statement by saying, “Every time we convert a warehouse into a data center, we get tremendous value, about $500 per square foot.”
Panattoni has already developed over 600 million square meters of industrial, office and retail space, but Panattoni’s announcement in August was not about converting existing warehouse and logistics center space, but rather about building dedicated, AI-focused data centers.
A new, dedicated data center group
In fact, California-based Panattoni plans to build one gigawatt (1 GW) of data center capacity over the next five years.
To drive this evolution, the company announced the formation of its North American Data Center Group, led by new partner Adam Kramer, who will draw on his experience as Executive Vice President at technology infrastructure provider Switch and CEO of carbon emissions management platform nZero to build this new group.
Having worked on multiple data center campuses around the world, Kramer has experience in site selection, incentive creation and data center development.
In his previous positions, Kramer was particularly successful in securing venture capital financing and promoting sustainability initiatives.
Both capabilities will be critical to Panattoni’s plans to build a North American data center portfolio.
“As someone who embodies our values well, I am confident that Adam will lead our newest division to great success and significantly strengthen our position in this fast-growing market,” said Adon Panattoni, Chief Executive Officer of Panattoni.
Panattoni added, “Adam’s expertise in corporate strategy, government affairs and sustainability, combined with his reputation as a leader in the data center industry, make him an ideal candidate to lead our North American data center group.”
Projects with a capacity of 100 to 500 MW planned
According to Roberts, the current plan for Panattoni’s new business unit is to build data centers with a capacity of 100 to 500 MW, both on existing sites and on land that is being offered for sale and on which new data center facilities will be built.
Given that the industry has been quick to lease data centers of this size to hyperscalers such as Microsoft, Google and AWS in the past, Panatttoni is clearly tapping into a lucrative market here.
The company is no newcomer to data center construction; it has announced the opening of a 48 MW campus in the Barcelona region of Spain in 2023.
Panattoni’s Roberts also noted that the high level of interest in data centers today reminds him of the shift in warehousing from traditional distribution centers to e-commerce fulfillment locations.
“This changing market is no different,” he said. “Data centers present an opportunity.”
If you think about building, they will come
The demand for data center space, especially in emerging development areas, has attracted companies from completely different industries that need space for warehouses. into the data center business.
As our own Rich Miller reported, Chuck Kuhn, owner of moving company JK Moving, kept buying land to build a warehouse for his company in Sterling, Virginia, and immediately started getting calls from data center companies wanting to buy the property.
This experience repeated itself and Kuhn eventually added the acquisition of land for data center development to his business portfolio. Kuhn has been involved in a number of significant data center projects, including developments for CyrusOne, AWS and Microsoft.
Kuhn’s name is so associated with data centers in the region that its most recent, high-profile acquisition – the Silver Line Development site in Sterling, announced in early August – specifically states that despite prior approval of over half a million square feet of non-residential use on the 3.3 million square foot site, construction of a data center is not being considered.
