Reporting on March 6 in The Registry, a chronicler of the U.S. Pacific Northwest Real Estate market, stated that Prologis, one of the main owners of warehouse spaces and logistics in the United States, has brought on data center industry veteran Chris Curtis, co-founder of Compass Datacenters, to lead its new $25 billion dedicated data center development arm.
Appointed global head of data centers for Prologis, Curtis will draw on his wealth of industry expertise and experience to guide that company along its path to expanding as an outright player in the hyperscale and cloud data center industry.
The company comes by its U.S. data center ambitions honestly. As reported by DCF's Rich Miller, Prologis has been partnering with Skybox Datacenters since 2021 to develop data centers in major U.S. markets including Chicago and Texas, an initiative taking root at the growing, critical intersection of logicistics and digital infrastructure.
Last May, Skybox and Prologis announced plans to build a massive 600 megawatt (MW) campus near Austin, Texas which will offer up to 4 million square feet of data center space.
Skybox Datacenters and Prologis recently opened a 30 MW, 189,000 sq. ft. project in Elk Grove Village, the rapidly rising data center cluster just west of O'Hare Airport, which has become a primary locale in the Suburban Chicago cloud market.
Prologis and Skybox have also teamed to develop a 30 MW data center in Northern Virginia, located in Sterling.
A Strategic Pivot
The Registry reporting characterized the move as a strategic pivot on the part of Prologis toward the development of data centers in response to burgeoning demand for digital infrastructure, fed by the incredible expansion of AI, hyperscale and cloud computing.
According to The Registry:
"Prologis’s transition into data center development is underpinned by the inherent synergies between warehouse and data center facilities, including similarities in structural and locational requirements such as access to substantial power sources and the adaptability of large industrial spaces.
This alignment is expected to efficiently utilize Prologis’s extensive warehouse portfolio for potential data center conversions or new developments."
The report said Prologis features putting near $8 billion into data centers over the next five years. Plans could include as many as 100 projects spawned from the entire $25 billion investment in data center stakes.
As somewhat coyly noted by The Registry, whereas "growth in the warehouse sector shows signs of moderation," a shift to the data center market stands to offer Prologis greater margins and growth potential.
As further reckoned by the report, "Prologis aims to leverage this transition to enhance its profitability and long-term value creation, with data center conversions offering 50 percent to 100 percent higher margins than traditional industrial margins."
In a LinkedIn post last month, incoming Prologis data center head Curtis noted his resignation from Compass Datacenters after more than 12 years of co-stewardship with Compass CEO Chris Crosby. Prior to Compass, Curtis operated his own investment firm developing and managing build-to-suit real estate projects in the U.S.
As reported by Datacenter Dynamics (DCD), in the newly created role at Prologis, Curtis will report to the company's global head of customer-led development, Damon Austin, and is charged with growing the company's data center business.
This will include assembling a dedicated data center team, while cultivating prospects in buildings and landholdings; along with sourcing, structuring, and executing data center developments, and fostering new customer relationships to scale the Prologis data center business.
As noted by DCD's Dan Swinhoe, "In the fourth quarter of 2023, the company said it had started more than $500 million in data center projects. Prologis said its customers have converted 28 buildings in the Prologis portfolio to data centers. The company said it plans to develop 20 more data centers over the next five years."
