Not every industrial building is a conversion candidate. Logan and Mitch put the shell first: roof load capacity for heavy mechanicals, slab thickness and floor load for servers and raised floors, clear height for airflow and hot/cold aisle containment, column spacing for server hall layout, yard access and overall structural integrity. Get those wrong and you face major reinforcement costs or an unsuitable property before power and cooling are even on the table.
Mitch's first screens include whether the community is open to data centers at all. Temporary moratoriums of six to twelve months are common while cities sort policy, and a use that is not already allowed can add years. They also look at what power the building once had and whether that infrastructure can be brought back. Available power is not the same as deliverable power, and new high-capacity electrical service is expensive and slow. Transformer lead times alone are often 12 to 24 months.
Even a structurally sound building can fail on cooling, power delivery or permitting. Mitch stresses outdoor yard space for cooling equipment and enough water to support the system. Much of today's equipment is air cooled, closer to a scaled-up residential outdoor unit, but water and space still have to pencil. Logan draws a sharp line between large training campuses and smaller industrial conversions aimed at edge inference, enterprise or colocation. A partner analogy they share with cities: edge inference is a Honda Accord on the street; a hyperscaler is a semi.
Reuse is not always faster or cheaper. Tear-down can win when structural fixes cost more than building new, when roof or slab capacity cannot be remediated, or when an undersized shell blocks a better purpose-built layout on the site. Environmental due diligence matters early: a Phase I ESA before major spend, and a Phase II if the Phase I flags issues. Logan's line for industrial owners: going forward, almost every industrial building with megawatts allocated to it will be more valuable. Episode 4 will cover neoclouds, end users and who is leasing this capacity.
Copyright 2026, Midwest CRE Advisors
