Data Center Site Selection

Cushman and Wakefield was retained by a global technology company to assist in the selection of multiple sites for the construction of a number of mission critical data centers. The priorities were to acquire 20+ acre properties within specific geographies of Ontario and Quebec that would allow for, and have the proper infrastructure to support, the construction of World Class data centers within a comparatively short timeframe. 

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)
- Client intended to development the property using their preferred contractors which was contrary to the desires of developer or ultra-high-net worth landowners who wanted to hold onto the land and/or build powered sells if not completed buildings
- 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
- Implemented a multistep process to progressively secure exclusivity to individual opportunities (letters of intent, confidentiality agreements, right of access agreements, agreements of purchase and sale etc.)
- Continually followed up with landowners to sustain momentum and develop leverage and sense of urgency

Results Achieved:
- Cushman & Wakefield managed 10 opportunities, resulting in the completion of 4 acquisitions, totaling 71 acres and a transactional value of $153 million.
- Achieved below market prices