Low-slung data centers look to the sky

A movement of data centers from the boonies to the burgs has led operators to reconsider the windowless, prison-like look that has defined data-center design for decades, resulting in projects more pleasing to the eye from street level.

Buildings of two stories or more are becoming more common, as urban and suburban builders don’t have the land to spread out, or don’t want to pay the higher costs of doing so.

“Data-center footprints are continuing to expand, and if you can’t go outwards, sometimes you have to go upwards," said Stephen Donohoe, vice president of global data-center design at Equinix.

The company has properties that rise eight, nine and 10 stories high in cities across the globe—plus its tallest, a 12-story building in Amsterdam. Some of its facilities have slick facades, exterior “green walls" of plants, or rooftop greenhouses powered by excess heat. Equinix also began using acoustic sensors this year to track pollinators like bees, helping it better select foliage, according to Donohoe.

“They can’t just be big boxes anymore," he said.

Meeting the AI boom’s exponentially greater power demands is among the factors that fed record high data-center construction in the first half of this year, according to real-estate firm CBRE. And overall construction of data centers is up more than sevenfold in just two years, says commercial property giant JLL.

High-rise, high cost

The traditional data center evokes images of sprawl—vast, one-story server farms set on thousands of acres of rural land. That’s the design developers have carefully refined over the past few decades to optimize their “cost per megawatt," said Raul Martynek, chief executive of data-center operator DataBank.

“Ideally, the best scenario is an industrial warehouse building, single-story," Martynek said. “When you go up, you introduce certain cost elements."

Those additional costs include things like more copper piping, to extend from the data-center floor to the generator yard, he said, and less roof space for equipment like chillers. Plus, urban land and power are just more expensive.

Yet building taller in cities like New York, Chicago, Los Angeles and San Francisco has allowed data-center operators to keep their services close to the areas they serve, said Dan Drennan, a principal and data-center sector leader at design firm Corgan.

Closer data centers mean faster connections and lower lag time for city dwellers and local companies—especially for uses like internet-connected devices—and it’s easier to find workers to staff the facilities.

Skyscrapers? Not just yet.

Compared with the U.S., international data-center hubs in denser regions have more, and taller multistory buildings, which the industry generally defines as more than two stories.

Singapore, for instance, is home to an 11-story Meta Platforms data-center campus, while tightly-packed Hong Kong boasts the 30-story iAdvantage data center. Land constraints have forced data-center designers there to “be more creative" in which mechanical and cooling systems to use and how to stack them, Drennan said.

As long as there are still large tracts of land to build on elsewhere, data centers over 10 stories aren’t likely coming to the U.S. anytime soon, according to Brett Rogers, chief development officer of data-center provider EdgeCore.

In New York and Chicago, however, some tall data centers—typically retrofitted older buildings—predate their sprawling rural cousins. Sabey Data Centers put several floors of servers in a 1970s-era 32-story high-rise, formerly the Verizon Building, in Manhattan’s financial district in 2011. In Chicago’s South Loop, an eight-story Digital Realty data center was originally built as a printing press around 1912.

But even mid-rise urban data centers need a makeover to blend with the cityscape. “Local engagement is something that we just don’t have that luxury of not having anymore," Donohoe said.

A five-story data center designed by Corgan for commercial real-estate firm Metro Edge on the West side of Chicago will incorporate metal panels, bricks and glazing, the design firm said, and trees and planter beds will surround its perimeter.

A suburban boom

Over the past two years, suburban areas have started to see growth in multistory data centers, too.

Suburbs near Chicago like Elk Grove and Franklin Park are running out of land for data centers, said Andy Cvengros, a managing director and co-lead of JLL’s U.S. data-center markets group. Data centers in Dallas and Atlanta are also pushing out into the burbs.

In those areas near Chicago, land prices have nearly tripled over the past 36 months, and “you’re butting up against residential, golf courses, highways, airports," Cvengros said. Add on the cost of power—especially if a utility provider needs to build a substation on-site—and “you’ve got to go vertical to make sense of those numbers," he said.

Suburbs are prime locales for NIMBYism, with residents complaining about the constant buzz the data centers make as well as the bulky blemish to neighborhood aesthetics. While a 72-foot tall data center doesn’t look out of place in a city, it “sticks out like a sore thumb" in a smaller market, Cvengros said.

In cities, two- and three-story data centers are already the norm. Cost efficiencies tend to taper off above that, said Julie Brewer, EdgeCore’s executive vice president of finance.

But just as the need and appetite for more compute continues to push data centers skyward, new demands for AI are driving them to their next inflection point.

For instance, rapid innovation in AI chip design has forced designers to rethink things like structural capacity and how much equipment is needed, EdgeCore’s Rogers said. Interest from new entrants, including the chip giant Nvidia, which is supplying data-center parts, and the planned Memphis, Tenn., supercomputer from Elon Musk startup’s xAI, will also likely push the boundaries of design, he said.

“It’s so hard to see what that horizon looks like 10 years from now, 20 years," Corgan’s Drennan said. “Does the building need to get taller? Does the space need to get bigger? Those are a lot of the conversations we’re having now."

Write to Belle Lin at belle.lin@wsj.com