Yahoo Finance JLL Says AI Demand Turns Data Centers Into ‘Hottest Asset Class’
(Bloomberg) -- Jones Lang LaSalle Inc.’s chief executive officer said demand is soaring for data centers as corporate America embraces artificial intelligence, creating a rare bright spot in a commercial-property market faced with rising office vacancies.
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“It’s the hottest asset class at the moment,” CEO Christian Ulbrich said Monday in a Bloomberg Television interview. “When you believe in AI, the demand for data centers will only go up.”
An AI spin on real estate adds to the technology’s emerging footprint in the US economy beyond the hardware and software industries. Utility company Dominion Energy Inc. said last week that data-center developers in northern Virginia were asking for the equivalent of several nuclear reactors’ worth of power. Another utility, Exelon Inc., predicted that AI-driven data centers in the Chicago area were poised to gobble up 900% more electricity.
“The shortage is usually the grid — that you can get access to the grid,” Ulbrich said. “But otherwise people are really, really keen to get into it, and that will be a play for the next five to 10 years.”
Ulbrich commented after Chicago-based JLL reported a first-quarter profit that beat analysts’ estimates. He credited improved efficiency in helping prop up margins at a time when “leasing markets were slightly patchy around the globe.” The US office leasing business posted a 14% gain, he said, buoyed by coming off a smaller base.
Logistics centers and multifamily properties are also holding up, Ulbrich said, while older, “commodity” office buildings struggle.
“It’s really the high end which is performing well,” Ulbrich said. “The rental rates for best-in-class office buildings are still rising all across the globe despite rising vacancy rates, which is kind of unusual. But we have seen that over the last 24 months.”
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