For commercial real estate investors, the fundamentals of location still apply in the digital age—but the definition of a “prime” location has evolved. In the world of data centers, it’s not just about land cost, power availability, and tax incentives. Connectivity—specifically fiber infrastructure—can be the deciding factor between a lucrative asset and a stranded investment.
Why Fiber Matters More Than Ever
Fiber is the digital lifeblood of a data center. Without robust, redundant, and high-capacity connectivity, even the most modern facility will underperform. As cloud adoption, streaming, AI workloads, and edge computing expand, the demand for low-latency, high-speed connections continues to surge.
For tenants—from hyperscalers to enterprises—fiber access isn’t a luxury. It’s a non-negotiable requirement that drives site selection and long-term occupancy.
Dark Fiber vs. Lit Fiber: Understanding the Options
When assessing potential sites, investors must understand the two main types of fiber:
- Dark Fiber – Unused optical fiber infrastructure that can be leased and “lit” by the tenant for complete control over bandwidth, security, and scalability.
- Lit Fiber – Fully operational fiber service provided by a carrier, with bandwidth managed and maintained by the provider.
Why it matters:
- Dark fiber offers flexibility and control but may require higher upfront investment.
- Lit fiber can be faster to deploy but may limit long-term scalability.
The Risks of Overlooking Fiber Infrastructure
Investors sometimes focus heavily on power availability and zoning, only to discover that a site lacks adequate fiber routes. This can lead to:
- Delays in construction and tenant occupancy.
- Higher build-out costs for trenching, permitting, and fiber installation.
- Reduced tenant pool due to limited connectivity options.
In competitive markets, these setbacks can erase margins and damage the investment’s long-term value.
What to Look For in a Fiber Assessment
Before acquiring land or funding a development, a thorough fiber feasibility study should be part of your due diligence:
- Number of carriers servicing the area.
- Proximity of existing fiber routes to the property.
- Diversity and redundancy of network paths to ensure uptime.
- Capacity for future growth as bandwidth needs increase.
Connectivity as a Value Multiplier
A data center with abundant, diverse fiber access doesn’t just attract tenants faster—it commands higher lease rates and delivers stronger returns. In markets where supply is tight, fiber-rich sites can give investors a competitive edge that’s hard to replicate.
Bottom line: In the race to meet global digital demand, connectivity is as fundamental as power and cooling. For commercial real estate investors, fiber isn’t just a technical consideration—it’s a core driver of asset performance and long-term value.
