Where the Wilshire boulevard begins in downtown Los Angeles, thousands of kilometers of sub-operative submarine cables disappear in an ordinary appearance office tower.
A Wilshire is the mother of all western data centers, a discreet terminus for the main digital links between Asia and North America which help support the bottomless need for the world of storage and computing power.
Formerly a workplace for lawyers and other types of white collars, the 30 -storey in the middle of the century of the middle of the century are now filled with cables, pipes, coolers, generators and other equipment necessary to support online functions that feed the economy and our private life at unmatched speed. (If you could get inside – and you cannot – the internet connection of the building would give you a second jump on the others when tickets for the World Series or a concert have been put up for sale.)
“We are all consumers of data centers”, whether it is a question of scrolling social media on our smartphones, watching streaming services such as Netflix on television or ordering a delivery of dog food on our laptops, said Maile Kaiser, director of income for the Data Center operator, the biggest tenant of a Wilshire. “Any content we manufacture is stored in a data center.”
The town hall is supervised by windows in an office space that has been stripped and is available to be used as a data center in One Wilshire in downtown Los Angeles.
(Genaro Molina / Los Angeles Times)
The digital transformation of a Wilshire, which is almost finished with the recent departure of one of the last conventional tenants, is part of a larger real estate boom in the county of Los Angeles.
While artificial intelligence and cloud storage are increasingly increasing space on the country's computer servers, real estate developers run to create new data centers or convert existing buildings into data uses. The need is so great, they find it difficult to meet demand as business in search of secure spots for their servers, rent almost all square feet that becomes available. Large -scale backup generators to maintain 24/7 operations during power failure are rare.
The construction of new data centers is at “extraordinary levels” driven by “insatiable demand”, a recent report on industry by JLL real estate brokerage.
The electrician Oscar Rivas works on a new system of generators on the third floor of a Wilshire, a high-rise office building which was almost entirely converted into a data center in downtown Los Angeles.
(Genaro Molina / Los Angeles Times)
“Never in my 25-year career in real estate, I have seen demand like this on a global scale,” said JLL real estate broker Darren Eades, specializing in data centers.
The largest engines are IA and Cloud service providers that include some of the biggest names in technology, such as Amazon, Microsoft, Google and Oracle.
With the occupation in buildings of conventional office, always strongly decreasing the effect of the drop in pandemic value and the properties of COVID-19, the data centers represent a rare mature opportunity for real estate promoters, who are looking for opportunities on the main markets such as LOS Angeles and fewer urban premises which are served by many powers and preferably cheap to manage data centers.
“If you can find an energy group to build a site, they will come,” said Eades about developers.
The construction takes place at an “extraordinary” rate on a national scale and still does not follow, the JLL data center report said. “The vacancy decreased to a lower record of 3% in the middle of the year due to the insatiable demand and despite the creeping construction.”
Development has increased more than seven years in two years, the pipeline of new projects amounting to the first half of 2024, a potential signal that the American electrical network cannot support development at a faster rate.
The satellites and antennas are perched on the roof at One Wilshire.
(Genaro Molina / Los Angeles Times)
But when the projects under construction or planned are completed, the American roommate market, in which companies rent a space in a data center belonging to another company for their servers and other IT equipment, will be triple in size compared to current levels.
With the release of Openai Chatgpt in November 2022, AI products and platforms have become omnipresent overnight, JLL said. The enormous amount of computing power required by the generative AI has the greatest impact on data storage, followed by continuous cloud growth.
Real estate investors and owners are attracted to the market because the demand for tenants is high and they are likely to renew their leases after having provided the costs of implementing data centers.
“They invest in their space and in your space and they tend to stay longer,” said Mark Messana, president of Downtown Properties, who has offices in Los Angeles and San Francisco. “As we all know, the offices market has a little trouble, so it's good to have data customers in the mixture.”
Rents in One Wilshire, for example, can be double what they are in the most recent amount of the city center, according to the supplier of real estate data Costar.
Servers, power lines and cooling equipment almost completely resumed the building, which was once a prestigious address for businesses. There are electric conduits that run stairwells and cable supports suspended from the ceilings. Two elevators have been removed so that empty trees can maintain the water pipes used to help maintain the temperature cool enough for heat producer servers.
Crypto.com Arena is seen on the roof of a Wilshire.
(Genaro Molina / Los Angeles Times)
The recent departure of a law firm that had been in the building for more than 50 years has eliminated five floors which will quickly be up to data tenants, said Eades, who represents the owner.
The challenges of the rapidly expanding data center industry include the search for workers trained in 24 -hour staff facilities, seven days a week.
“These are well -remunerated and high demand jobs,” said Eades, employers picking up majors in computer science and genius outside the college.
The work can however wreak havoc on workers. There are long hours in closed buildings with limited contact with the outside world, and night quarters “can be difficult to last from employees,” said the report. Thirty percent of the workers in the data center resigned from last year, citing misfortune with their work / life balance, according to the JLL report.
The filling of second and third shift work can add an additional or more month to the hiring process due to the reluctance of candidates to work over the hours, even when they pay more than day jobs, depending on the report.
South California suffers from a shortage of new data centers, while new users enter the market daily and demand continues to grow, JLL said. This stimulates development on the small markets of the County of Los Angeles like Vernon, which has its own power plant which provides electricity at rates cheaper than in surrounding cities.
Monterey Park, who is served by southern California Edison, is also “a hot area,” said Eades, where two new developments will be announced next month.
The demand for energy for IT increases so intense that it threatens to extend the country's electrical network, sending users to distant places where power is abundant and preferably cheap.
The developers of the data center work in Alabama, Dakotas and Indiana, “traditionally declares that it would not have data centers,” said Eades.
A company called Calethos provides a data center near the southern bank of the Salton Sea in the Imperial County of California. Electricity for servers in the data center would come from geothermal and solar factories built near the site in an area known as lithium valley. This data center would cover the size of 15 football fields And require a power that could support 425,000 houses.
Data centers have long been energy users. But the specialized computer flea required for a generative AI use much more electricity because they are designed to read large amounts of data.
The new fleas also generate so much heat that even more energy and water are necessary to keep them cool.
By 2030, data centers could represent up to 11% of American electricity demand – against 3% now, according to Goldman Sachs analysts. Last week, an agreement was announced in Reopen the infamous nuclear power plant on the island of three miles iN Pennsylvanie to supply Microsoft data centers performing cloud computing and AI programs.
The factory, the site of the worst commercial nuclear energy accident of the nation in 1979, was closed five years ago because it lost money. Microsoft has agreed to buy energy at the factory for 20 years if regulators approve its renewal.
“There will always be a need for a data center,” said Kaiser. “Everyone likes to create their content now, whether it is a photo or video or online purchases, we all do it. Now we will see what we are doing with AI.”
Staff writer Melody Petersen contributed to this report.
