In today's digital age, the demand for data centers has skyrocketed, presenting a lucrative opportunity for landowners to capitalize on their unused or under-utilized property. By leasing land for data centers, landowners can enjoy a steady stream of income while contributing to the backbone of the modern information economy. As a valuable asset in this tech-driven world, your land can serve a pivotal role in supporting critical infrastructure.
Listing your property for lease for a data center LandGate's marketplace not only increases your property's visibility but also connects you with potential lessees looking to establish cutting-edge facilities. Embrace the opportunity to maximize the value of your land and be part of the technological revolution.
Data Centers in the U.S.
The United States is experiencing a data center boom. With the exponential growth of technology and internet usage, the demand for data centers is at an all-time high. According to a report by CBRE, the U.S. currently has over 3,500 data centers and accounts for 45% of the global market share.
Benefits of Leasing Land for Data Centers
Leasing land for data centers presents numerous advantages for public and private property owners, providing an opportunity to capitalize on the technology-driven evolution of our economy. By tapping into this booming industry, landowners can ensure a steady income stream and contribute to local economic growth while retaining ownership over their property.
1) Revenue Generation Through Data Center Lease Payments
Leasing property and land for data centers provides property owners with a new long-term revenue stream through lease payments paid by the data center developer. This can be a significant source of income for property owners, especially those with large parcels of land in areas where data center demand is high. Additionally, leasing land for data centers allows landowners to monetize their property while retaining ownership of it for future generations to build generational wealth.
2) Economic Benefits of Data Centers
Data centers bring economic benefits to the communities where they are located. Data center development provides significant economic benefits by attracting new businesses, creating jobs, increasing tax revenue, and stimulating economic growth. Data centers necessitate a considerable workforce for construction, operation, and maintenance, thereby providing job opportunities for local residents.
3) Enables of Environmental Remediation Efforts
Leasing land for data centers can aid in environmental remediation of sites previously deemed unsuitable for other developments, enhancing land value and encouraging sustainable land use. As large plots for data centers grow scarce, properties like brownfields and contaminated sites will increasingly appeal to data center developers.
4) Gives New Life Into Underutilized Properties
Data centers have the potential to rejuvenate and repurpose neglected or abandoned sites. They can convert deserted locations, such as abandoned warehouses or vacant properties, into modern, well-maintained facilities. By revitalizing these areas, data centers enhance site quality and boost the neighborhood's visual appeal.
5) Promotes Infrastructure Advancements
Data centers can greatly enhance local infrastructure by necessitating consistent and reliable access to essential resources like roads, water, sewage systems, network fiber, and electricity. Often, developers invest in fortifying and upgrading these critical elements to support their operations. These improvements not only benefit the data centers but also foster a more robust infrastructure, attracting further development and bolstering the local economy.
The strategic placement and development of data centers in underserved regions not only enhance local connectivity and broadband deployment but also foster the expansion of fiber-optic networks, ultimately empowering communities to thrive in the digital age.
6) Real Estate Portfolio Diversification
For real estate investors and developers, leasing land for data centers offers an opportunity to diversify their portfolio. Purchasing properties suitable for data centers and then leasing those properties for data centers provides a stable and long-term investment, as this can generate long-term consistent revenue. As the data center market in the U.S. continues to grow and evolve, investors can mitigate risks associated with fluctuations in other types of real estate investments by incorporating properties suitable for data centers into their portfolio.
7) Data Centers Drive Renewable Energy Development
The high energy consumption of data centers significantly impacts electricity demand in the U.S. As businesses go digital and consumers use more online services, data centers operate near capacity. This increased demand strains the national grid, potentially raising electricity prices and carbon emissions if fossil fuels are used.
That being said, using renewable energy to power data centers is becoming an increasingly attractive option, so data center development is also driving renewable energy development. In fact, many companies, such as Meta, are already using renewable energy to power data centers.
Benefits of Data Center Development: Loudoun County, VA Example
Data center development has become a driving force in the economic growth of regions worldwide, and one compelling case study is the remarkable success story of Loudoun County, Virginia. The proliferation of data centers in Northern Virginia has not only revolutionized the technological landscape, but has also brought significant economic benefits to the region.
In 2018, Loudoun County had 13 million sq. ft. of permitted data centers. By 2024, this number has grown to 43 million sq. ft.—a 231% increase in just five years. With around 200 data centers, Loudoun County now leads the world, hosting a market larger than the next six U.S. markets combined. Megan Bourke, a county administrator, shared that 24 million more sq. ft. of data centers are planned over the next eight years, potentially pushing revenue past $1 billion.
This growth has boosted tax revenue by an estimated $890M, covering most of the county's $940M operating budget. A data center costs the county just $0.04 per $1 of tax revenue, compared to $0.25 for typical businesses. Thanks to this windfall, Loudoun County has the lowest real property tax rate in Northern Virginia, about 25% lower than neighboring counties.
Buddy Rizer, the county's Executive Director of Economic Development, said the extra funds from data center development have helped build $1 billion in roads and 36 schools in 15 years. Additionally, data centers have created 12,000 jobs in Loudoun County and attracted new businesses, further driving economic growth.
Why Leasing Land for Data Centers is a Popular Choice
One of the main reasons why leasing land for data centers has become popular is because it allows companies to keep up with the ever-growing demand without having to invest in expensive real estate acquisitions. By leasing land instead of purchasing it, companies can save on upfront costs and have more flexibility in terms of location and scalability.
Moreover, with the rise of land prices and shortage of available space, leasing land for data centers provides a practical solution for companies looking to expand their operations. It eliminates the need for developers to navigate zoning regulations, environmental assessments, and other challenges that come with purchasing land. It's important to note that data center developers will also purchase land for data center development. Whether or not a company will lease or purchase land for a data center all depends on the specific developer!
How to Lease Land for Data Centers
In conclusion, leasing land for data centers is a win-win situation for both landowners and companies. It provides an opportunity for property owners to generate steady income while contributing to local economic growth. At the same time, it allows data center developers to meet the growing demand without the burden of high upfront costs. As technology continues to advance and demand for data centers grows, leasing land for data centers will remain a popular choice, offering numerous benefits to all involved parties.
It's essential to conduct thorough research and due diligence when entering into any lease agreement, including understanding the terms and conditions, rental rates, and length of the lease. Consulting with legal professionals is also recommended to ensure a fair and mutually beneficial agreement.
For data center developers, it's crucial to assess the location carefully and consider factors such as power availability, network infrastructure, zoning regulations, and potential for expansion in the future.
To lease land for a data center, property owners can advertise their property for lease on online marketplaces where data center developers look for suitable properties to buy or lease.
LandGate's marketplace helps landowners connect with data center developers to explore lease opportunities at no cost. LandGate's marketplace is used by a wide network of data center developers to plan new projects and search for suitable sites. By listing properties for lease on LandGate's marketplace, landowners can learn if their property qualifies for a data center and explore potential lease offers at no cost and with no obligation to accept any offers.
