In this 30th article of our AI Corner, we offer Part 1 of a two-part MacRo Report series examining technological change, functional obsolescence and what today’s data-center development could mean decades from now.

If you want to see what happens when a massive Frederick County industrial operation becomes technologically and economically obsolete, you don’t need to imagine what might happen to a data center 30 years from now.

Just look at the former Eastalco aluminum smelting property south of Frederick.

For decades, Eastalco was one of Frederick County’s largest industrial operations—a sprawling, highly specialized manufacturing complex built around an extraordinarily energy-intensive process.

Eventually, aluminum production stopped. The plant closed. Much of the physical complex disappeared.

The property didn’t.

Today, that same industrial site is being transformed into Quantum Frederick, one of the largest proposed data-center developments in the region. Some of the characteristics that made the property suitable for heavy industry – including its substantial electrical infrastructure—helped position it for an entirely different technological use decades later.

Eastalco became obsolete.

The underlying real estate did not.

That distinction is worth considering as Frederick County debates another generation of enormous, highly specialized buildings.

A Reader Raises an Interesting Question

This subject came up after a reader responded to one of my recent MacRo Report articles about rapidly advancing data-center technology.

His concern was straightforward:

What happens to the massive data-center buildings being constructed today if advances in artificial intelligence, quantum computing or some technology we haven’t even contemplated dramatically reduce the physical space required for computing 10, 20 or 30 years from now?

Could today’s data centers eventually become tomorrow’s stranded real estate?

It’s a legitimate question.

Functional obsolescence is hardly new to commercial real estate. Buildings are constructed around the needs of an economy that inevitably changes.

Frederick County itself provides plenty of examples.

Frederick Has Been Reinventing Itself for Generations

The City of Frederick’s 2020 Comprehensive Plan offered a remarkably concise description of our changing economy:

“The canning, tanning, and knitting industries of the 19th and 20th centuries have given way to biotechnology, craft breweries and distilleries, and bitcoin technologies today.”

That statement was written before today’s data-center debate became a major local issue. Yet it describes something that has been happening here for generations.

Buildings have changed along with the economy.

The old Union Knitting Mills complex along Carroll Creek eventually found new commercial uses.

The former Mountain City Mill became the Delaplaine Arts Center.

Former manufacturing and agricultural-processing properties have been repurposed for offices, restaurants, retail, arts and other commercial uses.

Sometimes the building survives.

Sometimes only the land survives.

And sometimes an obsolete property is cleared entirely and begins another economic life—as happened at Eastalco.

Carroll Creek Is Another Form of Reinvention

One of Frederick’s most successful examples of adaptation isn’t really about an obsolete building at all.

It’s Carroll Creek.

What originated as a massive flood-control undertaking ultimately became the backbone of a revitalized section of Downtown Frederick.

The City’s Comprehensive Plan notes that public investment in Carroll Creek Park subsequently helped stimulate millions of dollars of private investment in new and renovated mixed-use buildings surrounding it.

We took a problem and an infrastructure investment and eventually created something substantially different from what had existed before.

That’s economic adaptation.

Then COVID Changed the Office Building

For those of us in commercial real estate, perhaps the most dramatic recent example arrived almost overnight.

COVID changed the American office market.

Millions of employees began working from home. Hybrid work became part of corporate culture. Companies reconsidered how much office space they actually needed.

Five years later, those changes were still clearly visible throughout suburban Maryland.

According to Transwestern, by the second quarter of 2025 the suburban Maryland office market had a 17.1% direct vacancy rate and 22.5% total availability. Year-over-year net absorption was negative by more than 520,000 square feet.

Frederick County proved considerably more resilient.

Its direct vacancy rate was 12.2%, compared with 22.8% in Bethesda/Chevy Chase, 19.5% in North Bethesda, 18.3% in Rockville, 23.1% in Germantown and 21% in Silver Spring.

Even more interesting, Frederick recorded nearly 98,000 square feet of positive year-over-year absorption while suburban Maryland overall was losing occupied office space.

And there’s an interesting historical comparison.

At the end of 2015—five years before COVID—Frederick County’s reported office vacancy rate was 15.3%.

By Q2 2025, five years after COVID fundamentally changed office culture, it stood at 12.2%.

The reports aren’t perfectly apples-to-apples—the later report excludes medical outpatient buildings, among other methodological considerations—so I wouldn’t suggest that COVID somehow improved Frederick’s office market.

But the larger point is difficult to miss.

Frederick’s office market proved remarkably resilient to a technological and cultural change that seriously disrupted many larger markets.

Growth Gives Frederick Another Advantage

Why?

There probably isn’t one explanation.

But Frederick’s population growth and economic diversification undoubtedly provide an important backdrop.

The City was already emphasizing economic diversification before the pandemic. Its Comprehensive Plan identified biotechnology, technology, manufacturing, healthcare, financial services and tourism among Frederick’s principal industries and specifically called for maintaining a diverse industry mix.

A rapidly growing population also creates continuing demand for healthcare, professional services, education, restaurants, retail and locally serving businesses.

Frederick hasn’t remained economically frozen while the world changed around it.

Canning changed.

Textiles disappeared.

Heavy manufacturing changed.

Eastalco closed.

Biotechnology expanded.

Downtown reinvented itself.

COVID changed the office market.

And Frederick kept growing.

But Is a Data Center Different?

None of this proves that every obsolete building can be successfully reused.

They can’t.

Some buildings adapt beautifully. Others become economically impractical to renovate. Still others are demolished because the land becomes more valuable for another purpose.

Functional obsolescence is real.

And that brings me back to the reader’s original question.

There is an obvious challenge to everything I’ve written here:

Scale.

Converting an old Frederick knitting mill is one thing.

What happens if technological change someday leaves communities with millions of square feet of highly specialized data-center buildings?

That’s a considerably different question.

And roughly 30 to 40 miles south of Frederick County, we already have a place where that question is becoming relevant.

Loudoun County, Virginia, reports that approximately 53.3 million square feet of data-center space is operating or under development.

That’s the equivalent of more than 100 buildings of 500,000 square feet each.

If computing technology someday requires substantially less physical space, what happens then?

That’s where I’ll pick up this discussion in Part 2 of the MacRo Report.

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Rocky Mackintosh, Broker of MacRo, LTD has been advising regional landowners, investors, and institutions for over 50 years.  He has been an active member of the Frederick community for over five decades and has served on a number of community organization boards, including as a member of the Frederick County Charter Board from 2010 to 2012.  Learn about his recent affiliation with Mackintosh, Inc., Commercial Real Estate.