One Small Flaw in the Plan
He's right that customers tend to not move.
On the other hand, when the bubble bursts, they'll go bankrupt.
And then you'll be left with an empty DC that's overly specialised.
And then you'll go bankrupt as well.
What do investors find most attractive about datacenters? One of the simple answers is customer lock-in. "When your contracts come to an end, your customers typically prefer to stay at your datacenter," said one asset firm exec. The AI hypescycle is luring new investors to the datacenter market who see an opportunity to cash …
Lots of (most?) commercial property has tenants who are fairly sticky for various reasons.
And yet a look at the commercial property market over the years suggests that doesn't necessarily make it a great investment - things change, sometimes rapidly, the tenants evaporate and you're stuck with a chunk of vacant property that's costing you money to own and you can't easily shift. If you're lucky it's generic or repurposable, if not...
Shopping centres/malls, office buildings, business parks, high street shops - all have been hot, then not.
The collapse of this latest hype is entirely predictable yet many will still get caught when it happens.