Ohio has emerged as a strategic location for data centers, offering high connectivity, affordable energy rates, and a favorable business environment. With a robust infrastructure and proximity to major population centers in the Midwest, Ohio provides an ideal setting for companies looking to establish or expand their data storage and processing capabilities. This data center boom has presented a great opportunity for property owners in Ohio to lease or sell their land for data centers development, which generates revenue and contributes to the growth of today's digital infrastructure.
What Should Landowners Know About Data Center Development in Ohio?
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.Over the last decade, the data center market has been growing rapidly, undergoing a remarkable transformation. LandGate's estimates show that the data center market is expected to over double in generated revenue by the end of 2025. In the midst of these rapid changes within the data center market, Ohio has picked up well deserved traction and is a strong contender for the main data center hub in the Midwest region of the United States.
Ohio plays a major role in its overall contribution to the data center economy. Aided by low latency costs, affordable power rates, robust infrastructural connectivity, and favorable business environment, Ohio has become a new focal point for digital infrastructure. LandGate’s data estimates that Ohio is set to bring in a total of $20+ billion into the data center market by the end of the decade. With these rising numbers, landowners in Ohio 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 within Ohio. 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 Ohio 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 by finding your property on LandGate's map and check out the data center value index score:
Why is it Attractive to Lease or Sell Your Land for Data Centers in Ohio?
Ohio shows over 120 data centers in the region, with an influx in hyperscale projects over the last few years. Major market players such as Expedient, CyrusOne, Cogent, and H5 Data Centers are leading the market and companies such as Amazon Web Services, Microsoft, and Google have caught up to speed with their large investments into hyperscale data center campuses. These large investors in the state have been quick to integrate artificial intelligence and environmental sustainability measures into their projects.
While the buildable acreage for data centers in Ohio 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 Ohio 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 Ohio.
Along with the financial gain from either selling or leasing land for data centers, landowners in Ohio should be aware of the benefits that developing a data center has on the regional and state economy. AEP Ohio reported over 30 GW of electricity demand for data centers, allowing alternatives to be a more efficient alternative for energy provision. With plans announced for a 120 MW natural gas plant, initiatives to supply power effectively have been called into action with Ohio leading the way for other states.
Ohio is not far behind in providing construction, maintenance, and full time employment opportunities. Each data center creates 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. With opportunities emerging across industries such as construction, AI, marketing, finance, and corporate, data centers have created numerous employment roles in the market. For example, Microsoft’s data center in Licking county created over 20 permanent roles and created over 150 construction jobs during its development.
Additionally, Ohio is leading advanced technological methodologies and is far ahead of other data center markets in incorporating artificial intelligence, machine learning, and edge computing methods within their work spaces to improve overall efficiency and performance. Ohio’s multiple long-haul fiber routes with low latency connections makes it an efficient spot for connection to internet exchange points and long haul access points. The state is also low on risk of natural disaster and climate change, thereby serving as a reliable site for construction. Latency reduction efforts, like reducing data file size for smoother data transmission, have increased with the advancement of technology within data centers.
Moreover, data center projects in Ohio are incorporating environmental sustainability methods to increase energy and productive efficiency, making them low-traffic sites with reduced infrastructural strain. For example, AWS hopes to switch all operations within the state to renewable energy loads by the end of the year. Similarly, Google has pledged a commitment to invest in wind and solar projects in the area. Many companies have included initiatives such as advanced cooling techniques such as liquid cooling of HVAC. Some data center companies have gone as far as to reduce 40% of energy consumption. Additionally, some companies have adopted 100% renewable energy as their main energy sources within data centers.
Leasing Land for Data Centers: Considerations for Property Owners
There are many benefits of leasing land for data centers! By leasing or selling property in Ohio for 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 Ohio for data centers, landowners should keep the typical acreage 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.
Ohio’s large market allows it to provide generous exemptions to investors and landowners alike. Ohio offers a 100% tax exemption for data center equipment and infrastructure for certain projects and thereby is one of the most cost-effective states for data center deployment. Long-term tax benefits also 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 Land in Ohio for Data Centers?
The process of leasing property in Ohio for data centers involves determining if your land is suitable to host a data center, marketing the property for lease, and then negotiating lease offers.
Step 1: Land Qualification
The first step for landowners in Ohio 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 Ohio 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:
Step 2: Market Your Property for Lease or for Sale for a Data Center
Listing your property in Ohio for sale or for lease for data centers 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 Ohio 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 Lease Offers
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: 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: 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.
Step 6: 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: Data Center Construction
Lease payments for data centers are phased as projects progress. Typically, the lease payments start as a small amount during the option period and increase during the construction phase of the data center, with payments reaching their peak upon completion of the data center. Depending on the size of the project, constructing a data center can take anywhere from 18 to 40 months before the data center reaches full operation. Smaller projects will take a substantially less amount of time to complete.
Step 8: 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.
