Data Center Site Selection

Situation:
Cushman and Wakefield was retained by a global data center operator to assist in the selection of a site for a new data center. The client was looking within a specific geography for vacant land and/or an existing building that could be demolished or retrofitted to be used as a data center.

The challenges with this assignment included:

- Client requirement to remain confidential to prevent unnecessary land value inflation
- Client required ownership of site and was hesitant to consider alternative deal structures (build to suit, land-lease of joint venture)
- The specific geographies targeted by the client consisted of
- significantly built out suburban areas with few truly greenfield opportunities 
- small lots requiring negotiation with multiple parties to acquire the desired acreage
- little to no “on market” properties
- situations where availability rates were below 1.5% meaning significant competition incurred when large industrial properties became available
- further limited availabilities due to access to power and fiber
- large parcels of land zoned agricultural or constrained by green belt regulations or environmental issues requiring longer lead times

The Approach:
- Comprehensive research done in the region
- Mapped and identified ownership of all large land and industrial parcels in the area (both “on” and “off”)
- Overlaid electrical power and fiber information to further qualify potential sites
- Contacted all land/industrial owners with characteristics to unearth off market transactions
- Worked with multiple site owners for potential assembly of land sites
- Worked weekly with client to create and update a short list of targeted options with multiple contingencies for each preferred site to develop and maintain negotiating leverage
- Continually followed up with landowners to sustain momentum and develop leverage and sense of urgency

Results Achieved:
- C&W identified a site owned by a proven market leader in Canadian development and construction formerly used as a pharmaceutical facility. The site was in a desirable location, included excess land and had the potential for a partial retrofit for a data center facility. C&W introduced the two parties and assisted with the negotiation of a joint venture agreement
- The data center operator entered into a joint venture and leveraged the Canadian development company's 30 years of experience and more than $4 billion in developed assets within Ontario to complete its first international expansion and develop a 56 MW data center campus in Toronto, Ontario.