Southern California's hottest commercial real estate market is for tenants that aren't human

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As artificial intelligence and cloud storage hoover up more and more space on the nation's computer servers, real estate developers are racing to build new data centers or convert existing buildings to data uses.

Where Wilshire Boulevard begins in downtown Los Angeles, thousands of miles of undersea fiber-optic cables disappear into an ordinary-looking office tower. One Wilshire is the mother of all data centers in the West, a discreet terminus for major digital links between Asia and North America that help sustain the world's bottomless need for data storage and computing power.

'They invest in their space and in your space and they tend to stick around longer,' said Mark Messana, president of Downtown Properties, which owns offices in Los Angeles and San Francisco. 'As we all know, the office market is struggling a little bit, so it's nice to be able to have some data customers in the mix.' Rents at One Wilshire, for example, can be double what they are at newer downtown office high-rises, according to real estate data provider CoStar.

 

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