Leasing property for data centers in Florida presents a unique opportunity for landowners, commercial real estate professionals, and government agencies with underutilized land. As the demand for data storage and processing continues to surge, driven by advancements in technology and the proliferation of data-intensive applications, the strategic use of available land for data centers can yield significant financial benefits. This blog post will delve into the advantages of leasing land for data centers, explore key considerations for stakeholders in this sector, and highlight how Florida's favorable climate and infrastructure can serve as a catalyst for growth and innovation in the digital economy.
What should property owners know about data center development in Florida?
Over the last decade, the data center market has been growing rapidly, undergoing a remarkable transformation. Data centers serve to be an essential part in maintaining internet growth and online service demand. They serve as specialized locations of vast computer networks and storage systems that work around the clock to process, store, and manage data.The North American data center market is projected to grow to $143.52 billion by 2028, with rapid demand expansion and a CAGR of 17.1%.
Florida is running as a top contender for data center market growth in the United States. The data center market within Florida is expected to be roughly valued at $4.5 billion by 2026, and currently hosts over 137 data centers statewide. With these rising numbers, landowners in Florida have experienced an increase in demand for their land to be used for data centers. Many developers are looking for land to expand existing sites and build new projects across the state, contributing to the large market for data centers in the area. These opportunities provide benefits not only for the general economy and the job market, but also for landowners across the state.
LandGate is a marketplace that connects property owners of all types who want to sell or lease their land directly to developers seeking land for the development of data centers, while also providing useful property data to owners to help them make informed decisions through this process. Equipped with information about the value of their land, capitalization rates, and much more, LandGate provides landowners in Florida with extensive property data at no cost to help navigate the process of leasing or selling their land for a data center.
To learn more about your property's potential suitability for a data center, get a free Property Report using LandGate's map and check out the data center value index score. Your property's suitability for a data center will be scored on a scale from 0-100.
Why is it attractive to lease or sell your land for data centers in Florida?
Florida has earned a space in the top 5 data center markets in the United States, becoming a promising location to sell or lease your land for data centers. Given the favorable business environment, reliable energy resources, and its great locational advantage, Florida data centers have a large scale of return. The state is diverse in the range of data center types it provides: from colocation to hyperscale and enterprise data center locations, with multiple solutions for small and growing businesses (insert name of type here). Major players such as Equinix, CenturyLink, Amazon Web Services, and QTS have set up large scale data centers within the area, and have been quick to integrate artificial intelligence and environmental sustainability measures into their projects.
While the buildable acreage for data centers in Florida can vary according to project specifications, the typical size range for small facilities can start off with just a few acres while large-scale projects cover an average of 100-150 acres. Larger data centers in Florida can exceed 200 to 300 acres. A medium-sized data center will typically range between 50-90 acres of land, and is the most popular size of property that developers demand in Florida.
Along with the financial gain from either leasing or selling their property for data centers, landowners in Florida should be aware of the benefits that developing a data center has on the regional and state economy. Florida has added over 3000 tech businesses in the last three years, with Information Technology full time positions concentrated within the data center market. Over the last two years, Florida’s tech net employment grew by 4.8%. For example, the NTT Global Data Center in Miami-Dade has had a significant economic impact through creating over 50 full time positions.
CyrusOne’s $7.5 million facility in Orlando created over 100 jobs across construction, maintenance, and information technology industries. With each data center creating hundreds of jobs for local contractors, suppliers, on-site and maintenance workers, they also generate full-time job opportunities across colocation facilities and hyperscale projects.
Additionally, Florida is moving towards advanced technological methodologies and has been fast spaced in data center technology development by incorporating artificial intelligence, machine learning, and edge computing methods within their work spaces to improve overall efficiency and performance. Latency reduction efforts, like reducing data file size for smoother data transmission, have increased with the advancement of technology within data centers. For example, Flexential’s efforts to integrate AI within their data center services has led to an overall 30% reduction in energy consumption and a 15% increase in cooling and predictive maintenance efficiency methods.
Moreover, data center projects in Florida are incorporating environmental sustainability methods to increase energy and productive efficiency, making them low-traffic sites with reduced infrastructural strain, which preserves the nature of rural land. Many companies have included initiatives such as advanced cooling techniques such as liquid cooling of HVAC. Major players such as Amazon Web Services and QTS have opted to take advantage of renewable energy and have installed large solar farms to completely power their data centers.
Overall, while land in Florida is traditionally used for agricultural purposes, data center projects will not have the added risk of being climate-dependent. Florida experiences a high water table due to its coastal location. To combat levels of extreme heat and humidity, combined with the risk of tropical storms and hurricanes, data centers have shifted towards modern construction methods to withstand natural disasters. The T5 Miami Data center is a prime example of disaster resilience efforts within the data center market: with raised floors to combat flooding, impact resistant windows, and backup power systems, the data center is well equipped to operate all year round while reducing damage and repair costs. Similarly, many data centers have taken on natural disaster and risk mitigation, creating location facilities that are built to withstand damage and have energy efficient ventilation systems, creating a reliable stream of income for landowners that lease their land for data centers regardless of the risk of natural disasters.
Considerations for Property Owners
By leasing or selling property in Florida for the development of data centers, landowners are able to contribute to the infrastructure that keeps the digital world and the economy running smoothly. Property owners of all types, ranging from individuals to corporations and governments, are not only a critical component in the digital network that supports the technology provided by data centers we need to operate every day, but also a key component to regional and state economic development.
When selling or leasing land in Florida for data centers, landowners should keep the typical size requirements in mind along with several other important considerations. Zoning and regulatory laws will impact the amount of land eligible for development. The property’s proximity to power and fiber optic sources will also affect a property’s suitability for data center development.
With Florida being at a locational advantage through serving as a trade hub and port for the country, landowners and data center developers can mutually benefit from the planning and development of data center projects. Florida is ranked first in the Southeast and fourth in the nation on business-tax-friendliness. Long-term tax benefits allow data center investors to enter into long-term lease agreements with landowners to construct data centers on their property, which provides a secure and consistent source of income for landowners.
What is the process of leasing property in Florida for data centers?
When it comes to leasing property in Florida for data centers, there are 8 main steps that property owners should be aware of:
Step 1: Evaluate Land Qualifications for Data Centers
The first step for landowners in Florida curious about leasing or selling their land for data center development is to understand if their land is suitable for a data center. Factors such as location, buildable acreage, zoning, topography, proximity to energy and utilities, and environmental considerations like flood zones and wetlands all impact a property’s viability for a data center.
Curious if your land in Florida could qualify for a data center lease? LandGate provides data center value index scores for every property in the U.S. within our free property reports. On a scale of 0-100, the data center value index score will let you know how suitable your property could be for data center development. Get a free property report by finding your parcel on LandGate’s map:
Institutional and government property owners in Florida also have the opportunity to lease their properties for data center development to generate revenue and contribute to economic growth. To learn which of your agency’s specific sites are most suitable for data center development, book a free consultation call with the government & corporate team at LandGate below:
Step 2: Market Your Property for Lease or for Sale for a Data Center
Listing your property in Florida for lease or for sale for the construction of a data center on LandGate’s marketplace is the best way to market and get the most value from your property. By listing on LandGate’s marketplace, you are presenting your property to various competitive companies actively searching for properties in Florida to lease or buy for data center development.
If you’re unsure if your property could be suitable for a data center, our team recommends creating a listing anyway- listing is completely free with no obligations to accept any offers, so you never know what kind of offers you may receive.
Step 3: Receive Offers to Lease or Sell Your Property for a Data Center
Once your listing is live on LandGate’s marketplace, any interested developers will reach out to you directly with offers using the contact information provided when you registered for your LandGate account.
Step 4: Data Center Lease Negotiation
Negotiating the ground lease offer is the first step you will take after receiving an offer. LandGate is unable to provide legal advice or assist with conducting due diligence on any offers that you receive, but we can refer you to a licensed expert that can help. These professionals, such as commercial real estate brokers, attorneys, and engineers, can assist you in ensuring that you are securing a good deal.
Always remember that lease agreements are completely negotiable. You can negotiate things like the value of the lease payments, the length of the lease, and the percentage of the escalator. Typically, ground leases for data centers range from 75-99 years, and generally provide escalating base rents, percentage rent arrangements, and outline responsibilities for maintenance and utilities.
Step 5: Data Center Lease Option Agreement
After negotiations, developers need to retrieve data center option agreements. Typically, this follows a check by the developer, ensuring that the land meets their needs and in the case of tax exemptions of subsidiaries, meets all necessary government requirements. It is essential for both parties involved in the agreement to assess possible engineering and land factors, to ensure the feasibility of the project and ensure that it receives all necessary approvals to begin. Oftentimes, data center proposals will be pitched to the county or state government.
Why can’t I get a data center lease agreement directly?
The process of developing any large data center begins with the developer optioning the land, also known as ‘site control,’ typically through a Ground Lease. Once thorough land evaluation has taken place, utility application is necessary. This means that the data center project will need further due diligence to ensure that sites have required proximity to a power source (renewable or a power substation), access to fiber optic cables, and that necessary easements are in place.
Where can a landowner get more information about the data center lease?
You can find out if your property could be suitable for a data center by getting a free property report from LandGate. LandGate provides data center value index scores for every property in the U.S., which will evaluate your property on a scale of 0-100, letting you know how suitable your property could be for a data center. Get a free property report by finding your parcel on LandGate’s map:
Step 6: Data Center Lease Agreement
Once site control is confirmed, the project is then moved to a ‘planned’ phase. The option agreement now becomes an official lease agreement, and the landowner begins to receive lease payments from the data center developer. The specific amount of these lease payments depends on what is negotiated in the lease.
Step 7: Active Data Center
After construction is completed and the data center is fully operational, the lease enters the ‘production’ phase, which indicates that the land is now responsible for data storage and transmission through the data center. This period will last throughout the remainder of the lease.
