For Data Center Leasing, Demand Doesn’t Always Come First

Demand should dictate lease costs, right? Yes, usually. But this maxim isn’t always true for the data center properties that are operating to host the zettabytes of data—that’s trillions of gigabytes—we’re all punching through with social media and synced business operations.

According to a recent CBRE study, a company looking to lease at a data center will spend $12 million more in one major city than another for the same amount of space. That’s because of variables such as new vs. mature markets, the local cost of power, climate issues, environmental risk, taxes and government incentives. For example, a market with a lot of properties, such as Silicon Valley, costs less to lease in than the up-and-coming Omaha, Neb., market, says Pat Lynch, managing director of CBRE’s data center solutions division.

Read entire article on National Real Estate Investor here.


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