The next frontier in real estate: Data centers on the moon and space-support infrastructure
4 min read
A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.
As private companies like SpaceX and Blue Origin develop reusable rockets and push aspirations for lunar and Martian colonization, real estate investors are dialing in. Some liken it to the early days of the railroads, when entire towns grew up around new lines. One of the biggest plays is lunar and deep space data centers.
Hines, a global real estate investment, development and management firm, recently announced the acquisition of the Titusville Logistics Center, a nearly 250,000-square-foot, Class A industrial property located in Florida’s Space Coast submarket. The property is fully leased to aerospace tenants. This is just one example of investors looking to capitalize on the boom in the space exploration sector’s real estate needs.
Real estate companies like Hines and Ethos are already building out space-support infrastructure in the outer space real estate race.
Courtesy of Ethos
“A real revolution has happened in the industry, and as things start to get unlocked, companies are looking for how they can monetize space more broadly, and there’s a lot of pieces to that,” said David Steinbach, global chief investment officer at Hines.
Steinbach points to both infrastructure support here on Earth, as well as real estate development for manufacturing on the moon. It may sound futuristic, but it’s already underway.
“We are in the early days of something that will be some major investments, and we’re creating these new rails of the future. In this case, it’s more into orbit instead of on the ground, but when you think about it that way, think about all the nodes that are going to get developed and created. It’s exciting, and I think investors need to be thinking that way,” he said.
Data centers in space
One of those rails is data centers. They are going up at a quick pace all over the world, and at the same time sucking up more energy than most local grids can handle. Putting them in space offers a fully decarbonized energy solution.
“There is unlimited power in space because of the sun, there is unlimited cooling with the vacuum of space, and there’s unlimited real estate in terms of where you can put these things,” said Steinbach.
Jason Marz | Moment | Getty Images
The data centers could be built on the moon and either kept there or launched into space. The data would simply be beamed back to Earth.
Several companies are already working on construction methods for the moon, including 3D printing. ICON, a Texas-based construction technology company, is collaborating with NASA on developing 3D printing technology for construction on the moon and Mars. NASA is providing support through its Small Business Innovation Research program.
And a California startup called Ethos says it has the technology for a moon-based cement ready to go, making it out of the moon’s primary material, anorthosite.
“Ethos takes the geological resources on the moon, and it turns them into buildable props,” said Ross Centers, the company’s CEO. “It’s a whole new world waiting to be developed, and we develop it. We turn it into landing pads, roads, foundations for data centers and other great things.”
Centers said Ethos can also use anorthosite to make raw materials for solar panels, conductors and other materials needed to build data centers and other industrial facilities. And he pointed to the massive proliferation of rocket launches that will only multiply. He calls that his ride.
“People are really excited about this vision. This is something that people have been looking for. It’s not every generation that you get a whole new continent to unlock,” said Centers.
Warehouse supply rising
Industrial warehouses here on Earth will still serve the space economy, Centers said, providing capacity for all the things that will be transported into space as well as areas for space-driven manufacturing.
But the warehouse sector overall is getting softer now, with vacancy rates at 8.5% in May nationally due to tariff uncertainty, according to Yardi Research. That’s up 290 points in the prior 12 months. Just 86.9 million square feet of new warehouse space was started as of May, on pace for the lowest annual total since 2018.
Steinbach admits that industrial broadly is seeing some headwinds in the U.S., and some submarkets – particularly the distribution centers for big box stores – are feeling that more than others. But he also said there are certain markets that are very undersupplied, and the space-support sector is one of them. That’s in both Florida and Texas.
Steinbach argued there needs to be more development, more capital going toward construction of the infrastructure necessary to support this space real estate race. But, as with everything else, higher interest rates are holding it back. If rates come down, he said, the capital will come.
“I think the capital is looking for great opportunities. They’re looking for great returns, and this is one of them,” Steinbach said.
