Jeffrey Moerdler

What distinguishes your data center and digital infrastructure practice?

I have been working on data center matters since 1990, so I have had the opportunity to watch the industry evolve dramatically. What began primarily as a real estate and telecommunications matter has become a highly sophisticated infrastructure business involving enormous power requirements, complex financing, advanced technology, billions of dollars and increasingly difficult site-selection decisions. That experience gives me a practical understanding of both the real estate and operational sides of these projects. Over the years, I have taken multiple telecom and technology engineering courses to understand the technology better. Today, I spend a great deal of time working with engineers, operators and business teams to understand what they need from a facility and then translate those requirements into workable commercial agreements.

What are the most important issues shaping data center development today?

Power is at the top of the list. For many major projects, particularly hyperscale and AI-driven developments, access to sufficient power can determine whether a site is viable before many of the traditional real estate considerations even come into play. But power is only one part of the equation. Developers and investors also need to think about water, fiber, transmission and utility infrastructure, permitting, financing, incentives and increasingly the response of state and local governments and surrounding communities. These issues are interconnected, which makes it important to address them early and in a coordinated way.

How is artificial intelligence changing the data center market?

AI has significantly increased both the demand for data center capacity and the scale of the infrastructure required to support it. We are seeing projects with power requirements that would have been extraordinary only a few years ago.

That growth affects virtually every aspect of a project, from land assemblage and power procurement to financing, cooling and long-term infrastructure planning. It is also accelerating interest in alternative energy solutions. When traditional utility capacity cannot be delivered in the amount or timeframe a project requires, developers are looking more closely at private generation, behind-the-meter solutions and other approaches. As AI evolves, we will continue to see growth in large multi hundred megawatt and gigawatt AI training campuses which can follow the available power, but we are also starting to see the next area of growth which is more urban and suburban AI inference sites that need to be near the user to avoid delays in communication of information. We are also seeing a resurgence in highly connected urban data centers for smaller enterprise and local users.

What makes data center leasing different from traditional commercial leasing?

A data center is a mission-critical facility, so reliability, redundancy and performance are fundamental business issues. The lease or services agreement must reflect how the facility will operate, the level of service the customer requires and how the parties allocate the risks associated with performance.

There is also no single solution that is right for every customer. A user needs to understand how critical its data and applications are, what level of redundancy it actually needs, what latency (communications delays) it can tolerate and whether a particular facility and operator is able to satisfy those needs. A major part of our role is helping clients match the contractual structure and level of service to their real business and operational requirements.

What should developers, investors and users be thinking about as the market continues to evolve?

They should be thinking beyond what a facility needs today. Power requirements, cooling technology, equipment, connectivity and customer expectations will continue to change, and these facilities require substantial long-term capital investment.

For developers and investors, that means considering scalability, reliability, access to capital and the ability to adapt a facility over time. For users, it means carefully evaluating the facility, the operator and the level of redundancy and service they actually require. The strongest projects are the ones that address those issues early and preserve enough flexibility to accommodate future change.