One of the biggest trends in the commercial real estate market in recent years has been a significant increase in the development of data centers. To accommodate tech services like AI computing, cloud data storage, cryptocurrency mining, and more, tech companies are requiring more and more facilities to store and service their data. As such, developers are constantly on the lookout for industrial properties that fit the specific needs of a data center, creating emerging opportunities for landowners. 

Here are a few things that developers are looking for in a data center development site!

Infrastructure

Likely the most important aspect of any kind of data center development is access to energy infrastructure. These facilities demand some of the highest energy requirements of any kind of development, meaning the sites that house them must be well-equipped to meet these demands.

Transmission Line

This is one of the most important aspects of a data center. These facilities require enormous amounts of energy to operate. Close proximity to existing high-voltage power infrastructure makes a site extremely attractive to developers.

Access to Substation

A nearby electrical substation with sufficient capacity is essential for power distribution. Developers are looking for sites with access to substations capable of handling the massive, continuous electricity demands of a data center.

Off-Take Capacity

Data centers draw large amounts of power from the grid and must be authorized to do so by their substation/power provider. Understanding upfront whether or not a site will be able to handle the electrical requirements of a large industrial project like a data center is important for developers during site evaluation.

Fiber Connectivity

Reliable high-speed fiber optic connectivity is a huge plus for data center developers. Existing fiber paths are one less hurdle for developers to overcome and mean less time and money are allocated to ensuring their data center has adequate internet bandwidth.

Zoning

Zoning regulations play a critical role in the site selection process for data center developers. Data centers are typically zoned under light industrial categories, so properties with this zoning already in place tend to attract more interest from developers.

While rezoning can be done, it usually extends project timelines and creates uncertainty for developers. Similarly, working against plans already set in place by local municipalities can complicate development and cause developers to look elsewhere.

Physical Attributes

Certain physical characteristics make a site more attractive for data center development. Developers generally seek parcels of 50 acres or more to accommodate large-scale data center facilities, infrastructure, and potential future expansion. 

Cooler climates, particularly those with average temperatures around 50 degrees Fahrenheit or lower, are advantageous because lower ambient temperatures reduce the energy required for cooling systems. Additionally, flat or gently sloping land simplifies construction and reduces site preparation costs. Properties with minimal elevation changes are preferred to streamline development.

The growing demand for data centers presents new opportunities for landowners with properties that meet these essential site requirements. By understanding the infrastructure needs, zoning considerations, and desirable physical attributes of these projects, property owners can position themselves to attract potential developers and capitalize on this expanding market trend.

If you’ve got questions about data center development or want to see if your land might be right for such a project, reach out to National Land Realty Commercial or get in touch with your local Land Professional today!