NEW YORK (TheStreet) --Sears Holdings (SHLD) officials and shareholders continue to tout the unrealized value of its real estate despite the tremendous amount of vacant commercial real estate in the United States.
Investors should not take seriously the recent claims by Sears that its stores now have tremendous value due to the potential for being converted into data centers. About that, Rich Kurtzbein, a research analyst who follows data centers for 451 Research LLC, warned that, "the viability of converting to data centers in shopping malls would be questionable at best."
This can be seen by the way Sears has already revised the way it has approached converting stores to data centers.
At first, Sears stated the stores were ideal for being large data processing centers. Then when that did not work, the company line became that the automotive centers would do quite nicely for centers. A recent article in Bloomberg Businessweek reports, however, that Google (GOOG), Facebook (FB), and Microsoft (MSFT), and other high tech entities, the very buyers Sears needs to attract, are spending billions to locate data centers overseas.
The data centers for Google, Facebook, Microsoft, and others are in rural areas close to cheap power sources such as wind and water. By contrast, 71% of the population in the United States lives within 10 miles of a Sears or Kmart, claims the company as a selling point. An empty store in a shopping mall in the middle of the suburbs is hardly going to work as a data center as there is not nearly enough space or enough cheap power. As the Bloomberg Businessweek article reports, "In Finland, Google uses wind power and frigid water from the Gulf of Finland to cool its computers."