In today’s AI-driven economy, connectivity is just as critical to property value as location, power, or entitlements. As demand for digital infrastructure surges—particularly in data centers, life sciences campuses, logistics hubs, and smart buildings—fiber optics have become a central part of commercial real estate strategy.
But not all fiber is created equal.
If you’ve come across the terms “dark fiber” and “lit fiber” in site diligence reports or tech stack proposals and wondered what they mean—or more importantly, which is more valuable to your asset—this post is for you.
What’s the Difference Between Dark Fiber and Lit Fiber?
Lit fiber is fiber optic cable that’s already “turned on” and managed by a telecom provider. The network is active, and the bandwidth is available as a service—usually sold at fixed speeds, like 10 Gbps or 100 Gbps. When your tenant pays for internet or a private network, they’re likely leasing lit fiber.
Dark fiber, on the other hand, is unused fiber optic cable. It’s installed, ready for use, but not currently transmitting data. Think of it as physical infrastructure without service—fiber lines that can be leased or purchased by tenants who want to “light” it themselves using their own network equipment. This gives them more control, more capacity, and often, lower costs over time.
Why This Matters to CRE Investors
Fiber is no longer just a tenant concern—it’s an asset-level differentiator. Here’s how each type of fiber impacts your portfolio:
1. Tenant Demand
AI companies, cloud providers, financial institutions, biotech labs, and hyperscale operators increasingly want dark fiber. It gives them raw, unfiltered access to infrastructure, which means they can control speed, security, and scale without depending on a telecom carrier.
2. Infrastructure Value
Properties with access to dark fiber—especially diverse routes and multiple carriers—are far more attractive for high-performance tenants. This is particularly true for data center developments, edge computing hubs, or innovation corridors near metro markets.
3. Investment Control and Recurring Revenue
Savvy landlords can monetize dark fiber by leasing it directly to tenants or selling long-term IRUs (Indefeasible Rights of Use). This transforms fiber into a revenue-generating utility, much like rooftop solar or backup power.
4. Risk and Redundancy
Lit fiber is easier to deploy and more predictable—but you’re dependent on a third party. Outages, congestion, or contract disputes with telecom providers can create friction. Dark fiber offers greater control and network redundancy, which is increasingly critical in mission-critical environments.
Key Questions Investors Should Ask During Site Diligence
- Does this site have access to dark fiber? If so, how many strands and from which providers?
- Is fiber diversity available (e.g., multiple entry points, separate physical routes)?
- Can the asset support tenant-installed network equipment?
- Are there local carriers or co-ops that manage open-access fiber?
- What is the cost and timeline to extend fiber to the site if it’s not currently available?
Final Thoughts: Fiber Is the New Power
As real estate assets become more digitally dependent, fiber is emerging as a utility class of its own—especially in AI-era development. Whether you’re investing in land for future data center conversion, upgrading an industrial park, or underwriting a next-gen office building, understanding the difference between dark and lit fiber is no longer optional. It’s essential.
For commercial real estate investors, fiber isn’t just infrastructure—it’s a value lever. The more control you (or your tenants) have over connectivity, the more resilient and desirable your asset becomes.
