Forget glitzy skylines, the new bright spot in commercial real estate is workforce housing for computers that can whirl data into artificial intelligence The latest hot spots in commercial real estate aren’t in Manhattan or Miami.

Instead of snazzy hotels or glistening office towers, the new property darlings are power-hungry data centers, often in places like Northern Virginia; Columbus, Ohio; and Salt Lake City.

Traditionally box style, these buildings are all about function: A place for racks and racks of computers to be stacked up high, kept cool, and girded for the boundless stream of images, videos, chats, text, internet searches and the digital detritus of our lives. 

Their goal isn’t merely to contain, host and sort data billowing from computers and smart devices, but increasingly to provide a place where machines can learn from it.

“Everything is AI right now,” said Sean Farney, a veteran of the data-center industry and a vice president of data center strategy at real estate firm Jones Lang LaSalle. “The most immediate impact is this huge, new organic demand for hosting the tech that makes AI work.” 

Farney, who helped Microsoft Corp. 15 years ago open a 120-megawatt data center in Chicago, one of the largest at the time, said the release of ChatGPT in late 2022 marked an industry turning point.

It galvanized Microsoft MSFT, +0.45%, Google parent Alphabet Inc. GOOG, -1.22%, Meta Platforms Inc. META, +2.48% and others to more quickly deliver their own artificial intelligence products. It also added to a gold rush in what had been a niche area of commercial real estate, an otherwise battered sector, especially when it comes to office buildings.

Power-hungry AI ChatGPT, which reached an estimated 100 million monthly users in its first two months, can generate text, images and more. Enthusiasm on Wall Street for all things AI provided rocket fuel to shares of chip-maker Nvidia Corp. NVDA, +4.00% and other “Magnificent Seven” tech stocks.

Listen: Nvidia’s path from videogame darling to AI powerhouse

Server maker Super Micro Computer Inc. SMCI, +4.54% has been among the latest stocks to benefit. And AI also has a hyper-focus on real estate that can handle the boom.