Can Data Centers Become a New Kind of Urban Heat System?

Real estate technology update

Author

Franco Faraudo
January 28, 2026

Propmodo Technology

By Franco Faraudo · January 28, 2025

Greetings,

For the last decade or so, the PropTech world has been fueled largely by investment capital. Venture firms poured hundreds of millions of dollars into real estate technology companies, betting that software and data could modernize one of the world’s most valuable and most resistant industries. This week offered a sobering look at how difficult that bet has been.

Reports that Fifth Wall, the largest venture firm focused on PropTech and climate tech, is laying off staff and pausing fundraising sent a quiet shock through the sector. The firm has raised more than $3 billion and built partnerships with many of commercial real estate’s largest owners and operators, yet its slowdown underscores how hard it has been to produce breakout winners. Fifth Wall is far from out of the game, but the stumble of what was once a PropTech juggernaut brings the industry’s slow pace of technology adoption into sharp focus and raises concern that its struggles could discourage future investment in the space..

This week, we are focusing on data centers. Specifically, we are exploring how these facilities are becoming more than just hubs for storage and computing. New designs are finding ways to capture and reuse the massive amounts of heat they produce. If adopted at scale, these approaches could help ease the growing backlash over data center energy consumption and support a more integrated role for them within our cities.

Let’s go!

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Energy & Sustainability

Can Data Centers Become a New Kind of Urban Heat System?

Data centers have long been seen as energy hogs, but a growing number of cities are starting to view them differently. Rather than serving only as digital infrastructure, some are becoming sources of usable heat for homes, campuses, and commercial buildings, suggesting that the rise of AI and the push for urban decarbonization may be more connected than expected.

https://propmodo.com/can-data-centers-become-a-new-kind-of-urban-heat-system/

Bytes

👷‍♂️ Construction agent
One of the places where AI agents seem to be finding adoption is in the construction industry, where they are being used to help manage the admin that comes with large construction projects.

🔦 Gentrification identification
AI has been successfully used to spot gentrification in Mexican cities based on a multitude of data.

🥶 Cool without coolant
A startup has created a new type of cooling system that is able to move heat using electrons in solid components, reducing the need for refrigerants.

Overheard

Decoding Real Estate Podcast

The Untapped Opportunity to Turn Multifamily Into a Hospitality Business With Alfred's Marcela Sapone

As resident expectations rise, multifamily owners are borrowing from hospitality to create service-driven buildings that unlock new revenue, reshape operations, and redefine what living experience really means.

https://propmodo.com/podcast/the-untapped-opportunity-to-turn-multifamily-into-a-hospitality-business-with-alfreds-marcela-sapone/

Propmodo Live Webinar

Exploring the Next Wave of Security and Access Control

Explore how next-generation security and access control systems are reshaping office buildings, improving safety, operations, and tenant experience in a changing commercial property landscape.

https://propmodo.com/exploring-the-next-wave-of-security-and-access-control/

More Propmodo Technology

Beyond the AI Bubble: Building Enduring Intelligence for Real Estate

In order to prevent an AI bubble, real estate tech companies are having to prove practical uses of artificial intlligence that can actually work at scale to help opperators save time and money.

https://propmodo.com/beyond-the-ai-bubble-building-enduring-intelligence-for-real-estate/

Data Centers Are Eating Construction Pipelines

A surge in data center development backed by AI and cloud demand is pulling capital and builders away from traditional commercial property types, reshaping the real estate development landscape in 2026.

https://propmodo.com/data-centers-are-eating-construction-pipelines/

The Next Housing Search War Is About AI Not Listings

Google’s new real estate ad tests highlight growing pressure on Zillow and signal a larger shift in how homes may be discovered as AI reshapes search, traffic, and consumer intent.

https://propmodo.com/the-next-housing-search-war-is-about-ai-not-listings/

Why Rental Screening Must Evolve in the Age of AI

AI is reshaping rental fraud, enabling smarter scams and stronger defenses through layered screening, verified data, and standardized digital processes.

https://propmodo.com/why-rental-screening-must-evolve-in-the-age-of-ai/

The Real Bottleneck in America’s AI Boom Isn’t Chips, It’s Power

AI’s fastest growth is shifting to the power-rich South, straining grids and sparking utility lawsuits as massive GPU clusters reshape America’s data center geography.

https://propmodo.com/the-real-bottleneck-in-americas-ai-boom-isnt-chips-its-power/

Propmodo Technology is edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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