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Can I sell this land as data center real estate?

I have one acre of real estate located near multiple data centers that cater to the financial community. Can the property, with a 35,000 square foot building, host a data center?

To avoid buyer's remorse, take size -- among other factors -- into consideration when purchasing data center real...

estate.

Exactly how close is your land to potential customers? With financial data centers, each meter of distance has to be counted; it can introduce extra nanoseconds of latency that makes your land worth considerably less than real estate in closer proximity to a user.

Look at how packed the existing data centers are in that area. If they run close to 100% capacity, then your space will be in demand. However, if the facilities nearby run at 60% capacity or less, then this volume needs to be filled before users call for more space.

Real estate is about more than space, so look at availability of services. Is your land easily connected to multiple power and Internet connectivity feeds from multiple providers? Could large vehicles bring in containerized systems, heavy equipment for power generation, large cooling systems and building equipment?

Who do you expect to invest in data center real estate for development? If an existing provider, such as Equinix, is your target buyer, then the real estate is probably close enough to one of its existing campus locations for the addition to make sense.

If you foresee a new data center player buying the property, consider the risk of the company dropping out of the purchase as they perform due diligence on connectivity, access and so on.

Lastly, how much do you want for the land? Take the figure as a starting point, then discount heavily for any site-based deficiencies in the areas described above.

To sell land as data center real estate, you don't need an agent, but you should consult a legal representative. Legal experts verify that the discussions are all above board and any agreements are solid -- with no fall through if the buyer finds pollution or landfill on the site after the sale, for example. Consider this added expense as upfront due diligence. Once the deal is struck, there has to be no come back to you at all.

This was last published in October 2014

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What other factors do you consider when purchasing data center real estate?
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Assuming that we place the integrity of the data streams in the server itself, we are looking for physical safety when we purchase data center real estate. We need a location that is remote with plenty of interior and exterior physical security.
We also need a location that has a consistent temperature. We try to stay away from areas that are known to have a great deal of humidity.
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We just recently had a question about security in colocation centers post on SearchDataCenter. If security is a concern it might be worth a quick read: http://searchdatacenter.techtarget.com/answer/Can-vendors-go-unescorted-in-a-secure-colocation-center
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