Data Center Brokers Must Underwrite Risk, Not Just Land

Data center brokerage is quietly becoming an infrastructure business. Raul Saavedra, who heads Colliers Americas' data center advisory practice out of San Francisco after arriving from Digital Realty, used The Real Deal's Deconstruct podcast to describe a market knocked off balance by a pandemic-era 'massive uptick of compute' that collided with the growth of artificial intelligence before the industry could respond. Deals now require financing in place, infrastructure solved, and a hyperscaler at the table, he said—like assembling an airplane and hoping nothing fails.

Saavedra put the added risk on developers as development costs exploded, a point this publication has argued is separating data center sponsors who can source power from those who cannot. The podcast adds a second filter: a business that once did its most important work behind closed doors now faces political and community pressure, and Saavedra said the front end may become more collaborative as developers and brokers help affected communities understand how the facilities work and what they offer.

Data center demand is pulling institutional real estate capital toward power, land, and cooling, so underwriting is starting to look more like infrastructure than property. If community acceptance becomes a gating item, the cost of capital for a project will hinge on a sponsor's ability to win local support, not just its balance sheet—a new variable for a sector that until recently closed its deals in private.

If Saavedra is right, the brokerage playbook is due for an update. The old job was marketing a site to a tenant. The next job is assembling a feasibility case—power availability, cooling, infrastructure cost, financing, and community acceptance—before a hyperscaler will take the meeting. Brokers who can underwrite that full stack will set the terms of the next cycle, while those who treat data centers as oversized industrial listings will get pulled in after the real decisions are made. The industry is still young as a property type, Saavedra noted, but the risk profile is maturing faster than the asset class. The next hiring wave will favor professionals who can read an interconnection study, not just a rent roll.