From Retail to Racks: How Malls and Big-Box Stores Are Becoming Data Center Real Estate

The decline of traditional retail has left behind a trail of shuttered malls and vacant big-box stores across the globe. Once bustling centers of consumer activity, these properties are increasingly being reimagined for new purposes. One of the most surprising — and potentially lucrative — conversions is transforming these spaces into data centers. 

With their large footprints, robust utility connections, and urban proximity, malls and big-box stores are proving to be prime candidates for digital infrastructure. As cloud adoption accelerates, AI workloads expand, and colocation demand rises, retail-to-racks conversions are emerging as a new frontier for data center real estate investors, developers, and operators. 

This article explores why these retail properties make sense for data centers, the benefits and challenges of conversions, notable case studies, and what this trend means for the future of digital infrastructure. 

Why Malls and Big-Box Stores Are Attractive for Data Centers 

Size and Layout Advantages 

Malls and large retail spaces offer expansive floor areas with high ceilings, making them ideal for housing data halls. Their existing layouts can be adapted for modular colocation suites or wholesale tenants without requiring extensive new construction. 

Strong Utility Infrastructure 

Retail centers were designed to handle large numbers of visitors, meaning they often already have robust electrical, HVAC, and water systems. While upgrades are necessary for high-density computing, the baseline infrastructure is a head start compared to raw land development. 

Urban Proximity 

Many malls and big-box stores are located in or near urban centers. This provides data centers with low-latency connectivity to enterprise customers, financial institutions, and end users. Proximity to cities also enables better access to workforce talent. 

Transportation and Accessibility 

Retail properties are typically situated along major highways and transit routes, making them easy to access for technicians, suppliers, and customers. This logistical convenience reduces operational friction. 

The Investment Case for Retail-to-Data Center Conversions 

Lower Acquisition Costs 

As retail struggles, many malls and big-box sites are available at discounted prices. For investors, this presents a cost-effective entry point into digital infrastructure real estate. 

Speed to Market 

Compared to greenfield development, conversions can accelerate time-to-market. The core structure is already built, reducing permitting and construction timelines. For colocation providers facing high demand, this speed is a competitive advantage. 

ESG and Sustainability Benefits 

Repurposing existing buildings reduces the need for new construction, aligning with sustainability goals. Investors can position these projects as adaptive reuse success stories that avoid wasting embodied carbon. 

Flexible Leasing Options 

Converted properties can accommodate both colocation tenants seeking smaller footprints and wholesale clients leasing entire halls. The flexibility of the retail layouts makes mixed-tenant strategies viable. 

Challenges of Converting Retail Properties 

Structural Modifications 

While malls offer space, they often require significant structural upgrades to support heavy racks, raised floors, and specialized cooling equipment. Reinforcing floors and walls adds to conversion costs. 

Power Upgrades 

Retail-level electrical capacity is far below what data centers need. Developers must coordinate with utilities to bring in substations and high-voltage connections, which can delay projects. 

Cooling Infrastructure 

Retail HVAC systems are not designed for high-density compute. Conversion requires installing industrial-grade cooling, often including chillers, liquid cooling loops, or immersion systems. 

Zoning and Community Pushback 

Some retail areas are zoned for commercial use, not industrial. Rezoning may be required, and communities may resist the idea of data centers replacing traditional retail, fearing noise, traffic, or aesthetic changes. 

Notable Case Studies in Retail-to-Data Center Transformation 

The United States: Shopping Malls to Server Farms 

Several U.S. malls have already been converted into data centers. In Ohio, a shuttered shopping mall became a colocation facility after its anchor tenants left. The property’s large footprint and central location made it a natural candidate. 

Europe: Repurposing Big-Box Stores 

In Germany, a former big-box electronics store was transformed into a regional data center hub. Its existing power infrastructure and proximity to urban demand centers made the project cost-effective and strategically valuable. 

Asia: Adaptive Reuse in Dense Cities 

In Japan, where land scarcity is acute, developers are exploring conversions of underperforming malls into data centers. These projects address both real estate oversupply and digital infrastructure demand. 

Colocation Benefits from Retail Conversions 

Colocation providers see retail conversions as a way to expand quickly in metro markets where new land is scarce and expensive. By converting malls, providers can offer low-latency colocation services close to enterprises, financial firms, and government agencies. 

Retail sites also provide opportunities for edge computing deployments. By hosting micro data centers within former retail footprints, providers can deliver faster performance for AI, IoT, and 5G applications. 

Wholesale Colocation Potential 

Wholesale colocation clients benefit from conversions that deliver large, contiguous space at a lower cost than ground-up construction. For hyperscalers seeking metro presence, converted malls offer urban-scale footprints without waiting years for new campuses to be developed. 

This model is especially attractive in markets where land scarcity and permitting delays have slowed hyperscale growth. Retail conversions provide a shortcut to capacity. 

Will Retail Conversions Become Mainstream? 

The adaptive reuse of malls and big-box stores for data centers is still in its early stages but gaining momentum. As more retail properties face obsolescence, conversions could become a mainstream strategy. 

Several factors will determine how quickly this trend scales: 

• Utility Cooperation – Success depends on the ability to upgrade power capacity quickly. 
• Government Incentives – Tax breaks and zoning approvals can accelerate projects. 
• Market Demand – Metro colocation growth and AI-driven workloads will push demand closer to cities. 
• Investor Appetite – As more case studies prove successful, institutional investors may flood the sector. 

What’s clear is that retail-to-racks conversions align with the broader shift toward urban edge data centers, creating opportunities for operators, investors, and communities to reinvent underutilized spaces. 

Why This Matters for the Data Center Industry 

The data center real estate market is evolving. No longer limited to greenfield campuses in remote areas, infrastructure is moving into repurposed urban spaces. This trend expands colocation and wholesale opportunities while giving investors a new way to profit from distressed retail. 

For communities, these conversions bring jobs, tax revenue, and revitalization to abandoned properties. For enterprises, they provide closer, faster, and more sustainable colocation options. And for hyperscalers, they deliver new urban-scale footprints without waiting for long construction timelines. 

The bottom line: the future of data center real estate may be hiding in plain sight — in the shells of yesterday’s malls and big-box stores.