Data Centers Market Report for Property Owners (August 8, 2025)

Executive Summary

Data centers are the digital backbone of the global economy, powering cloud services, streaming, AI, and enterprise IT. Demand for reliable, scalable, and secure facilities continues to accelerate as organizations migrate workloads, adopt hybrid IT, and deploy latency-sensitive applications. For property owners, hosting a data center — whether a multi-tenant colocation facility, a hyperscale campus, or a distributed edge site — offers the potential for long-term, credit-worthy tenants and infrastructure investment.

This report explains where each data center type fits, how site selection decisions are made, the critical infrastructure requirements (power, cooling, connectivity, security), how to structure lease and service agreements, and the operational standards needed to protect uptime and asset value.

• Data Centers (Parent Category): Encompasses all facility types supporting IT workloads — from regional colos to hyperscale campuses.
• Colocation Facilities: Multi-tenant environments where customers lease space, power, and connectivity within a shared facility.
• Edge Computing Sites: Smaller facilities sited close to end-users for low-latency workloads (content delivery, IoT, AR/VR, autonomous systems).
• Hyperscale Data Centers: Massive, purpose-built campuses for cloud giants and global platforms, designed for scalability and efficiency.

Across formats, owners succeed by securing robust utility power, redundant connectivity, stable climate control, strong security, and favorable jurisdictional conditions. Agreements should align on uptime SLAs, power pricing, expansion rights, and sustainability targets.

1) Market Overview & Growth Drivers

Data center demand continues to outpace supply as AI training/inference, cloud migration, streaming, gaming, and always-on enterprise apps drive unprecedented compute and storage needs.
Hyperscale operators are leading multi-gigawatt capacity plans, while enterprises increasingly shift from on-prem to colocation and distributed edge to reduce latency and capex.
Power availability, network diversity, and speed-to-market are the dominant gating factors shaping site selection and lease economics.

Key Growth Drivers

• AI & High-Performance Computing: Model training and inference clusters require high-density racks, liquid-ready cooling options, and large, scalable power blocks.
• Cloud Migration: Enterprises continue consolidating workloads into colocation and hyperscale platforms to control costs and improve resilience.
• Latency-Sensitive Apps: Gaming, AR/VR, autonomous systems, fintech, CDNs, and IoT push compute closer to users via edge sites.
• Data Sovereignty & Compliance: Regional rules and industry certifications (e.g., ISO 27001, SOC 2, HIPAA/PCI) localize demand and influence facility design.
• Sustainability Targets: Tenants prioritize renewable PPAs, grid carbon intensity, energy efficiency (PUE), and heat-reuse options.
• Interconnection Ecosystems: Carrier-neutral facilities near internet exchanges and cloud on-ramps command premiums.

Market Shape & Location Patterns

• Tier-1 metros: Deep network density and talent pools; constrained power/land often increase costs and timelines.
• T2/T3 growth corridors: Attractive utility pricing, faster entitlements, and land availability; critical to verify long-term grid capacity.
• Edge clusters: Smaller footprints positioned near population or device hubs; value speed-to-deploy and diverse fiber paths.

Implications for Property Owners

• Power (first gate): Demonstrable near-term capacity and a path to scale.
  Edge: ~0.5–5 MW. Colo phase 1: ~5–20+ MW. Hyperscale: 50–300+ MW over phases.
• Connectivity: At least two physically diverse fiber entrances and multiple carriers; room for laterals to nearby meet-me hubs.
• Site Envelope:
  Edge: pads BTS/modular;
  Colo: ~1–5 acres (retrofit or ground-up);
  Hyperscale: 50–200+ acres with substation adjacency and expansion optionality.
• Building Fundamentals (for retrofits): Floor loads (200–300+ psf in white space), clear heights, roof structural capacity (mechanical), dock/yard circulation, and setback/security standoff.
• Risk Profile: Outside floodplains, low wildfire/seismic/liquefaction exposure where possible; dual-feed utility options and redundant routes.
• Zoning & Entitlements: Industrial/commercial with allowances for large electrical/mechanical yards, generators, fuel storage, screening, and security fencing.
• Sustainability Levers: Access to renewable supply (on-site or PPA), heat-reuse opportunities, water availability/alternatives for cooling.

Owner Readiness Checklist (use before tenant outreach)

• Obtain a utility letter outlining existing capacity, upgrade path, and timeline.
• Map fiber providers, existing conduits, and feasible diverse entrances.
• Confirm zoning/permits for generators, fuel, chillers, security, and rooftop/mechanical yards.
• Prepare a concept site plan with phases (power blocks, white space, yard layout).
• Compile a risk summary (flood/seismic/fire), and mitigation measures.
• Outline incentives (property/utility tax abatements, fast-track permitting) and ESG positioning.

Need a property-specific scoring and tenant fit? SiteBid can produce a rapid readiness report, introduce carrier/utility contacts,
and align your site with colo, edge, or hyperscale requirements. Request an assessment.

2) Zoning, Permitting & Incentives

While most industrial and commercial zones permit data centers as a use by right or with minor conditional approvals, local jurisdictions increasingly scrutinize power and water usage, noise emissions from generators and mechanical systems, and potential traffic from construction and operations.
According to Data Center Frontier, over 50% of new U.S. data center projects in 2024 required additional review for utility demand, environmental compliance, or community impact.

Many states and municipalities actively court data center development through property tax abatements, sales/use tax exemptions on IT and construction equipment, expedited permitting lanes, and renewable energy credits.
For example, Virginia offers 20-year equipment sales tax exemptions for qualifying projects, while Texas extends 10–15 year abatements to large-scale facilities meeting minimum capital and job thresholds.

Owner Action Steps

• Confirm local zoning explicitly allows large electrical/mechanical yards, backup generators, and secure perimeter fencing. Engage a land-use attorney early for conditional use or variance procedures.
• Assess current property tax classification and negotiate abatements; many jurisdictions will lock in reduced assessments for multi-year buildouts.
• Engage utility providers at the feasibility stage to understand interconnection capacity, redundancy options, and construction lead times. In high-growth metros, large utility upgrades can exceed 24 months.
• Review water sourcing and discharge permits for evaporative cooling or hybrid systems; in water-restricted states, plan for air-cooled alternatives.
• For hyperscale or greenfield developments, budget for environmental impact assessments covering noise, visual screening, habitat, and carbon disclosures.

Incentive Strategies

• Target states or municipalities with active data center incentive programs and published economic development roadmaps.
• Prioritize brownfield or retrofit sites where existing entitlements can cut months off permitting timelines.
• Integrate renewable energy procurement (on-site solar, wind PPAs, renewable energy credits) to align with tenant ESG mandates; as of 2025, over 70% of Fortune 500 cloud and colo tenants have carbon-neutral or net-zero targets (IEA).
• Leverage federal programs such as the Bipartisan Infrastructure Law for grid modernization, renewable integration, and rural broadband/fiber extensions that can complement data center infrastructure.

Tip: Create an “incentives matrix” for your property that lists local, state, and federal benefits, timelines, and eligibility criteria. This tool can help shorten negotiations and improve tenant conversion rates.

3) Where Each Facility Type Excels

Each type of data center—colocation, edge computing, and hyperscale—serves a distinct role in the digital infrastructure ecosystem. Understanding the strengths and limitations of each helps property owners position sites for the right tenant profile and investment scale.
In 2024–2025, global colocation capacity grew by 8%, edge deployments rose by 15% (IDC), and hyperscale campuses continued multi-gigawatt buildouts led by cloud majors (Synergy Research Group).

Colocation Facilities

• Best For: Multi-tenant enterprise workloads, interconnection hubs, disaster recovery, and hybrid cloud deployments.
• Key Inputs: Dense metro connectivity, carrier-neutral meet-me rooms, modular expansion capability, and a diverse ecosystem of network/cloud providers.
• Market Note: As of 2025, Reuters reports colocation providers are pushing into secondary metros to access lower land/power costs while still serving regional enterprise hubs.

Edge Computing Sites

• Best For: Latency-sensitive workloads in metro or district proximity—such as gaming, AR/VR, autonomous vehicle networks, and IoT processing.
• Key Inputs: Small physical footprint, proximity to population/device clusters, low-latency fiber routes, and rapid deployment (modular/containerized builds).
• Market Note: According to Gartner, over 50% of enterprise-generated data will be processed outside the traditional data center or cloud by 2025, fueling demand for edge-ready locations.

Hyperscale Data Centers

• Best For: Cloud platforms, global content providers, AI training clusters, and large-scale SaaS platforms.
• Key Inputs: Hundreds of megawatts of scalable power, extensive acreage (50–200+ acres), network hub adjacency, long-term utility contracts, and favorable permitting environments.
• Market Note: Hyperscale operators (AWS, Google, Microsoft) accounted for over 70% of new capacity additions in 2024 (CB Insights), with site selection increasingly tied to renewable energy availability and multi-phase build potential.

Owner Takeaways

• Align your site marketing to the facility type’s decision drivers—colo tenants value connectivity density; hyperscale tenants prioritize scalable power and land; edge operators need fast-to-market modular sites.
• Benchmark your site against competitive locations using tools like Data Center Market to identify strengths and gaps.
• Engage with brokers or advisors experienced in that specific facility type to shorten deal cycles and avoid misaligned prospecting.

4) Product Segmentation & Owner Considerations

Data center investment strategies vary by product type, with each segment offering distinct revenue potential, operational demands, and risk profiles.
In 2024–2025, average wholesale colocation lease rates in Tier-1 U.S. markets hovered around $120–$150 per kW/month, while edge deployments averaged $180–$250 per kW/month due to smaller scale and higher per-unit infrastructure costs (CBRE).

Colocation Facilities

• Pros: Diverse tenant mix reduces vacancy risk; recurring revenue streams from space, power, and interconnection; ability to monetize carrier interconnection fees.
• Cons: Higher operational complexity; requires robust technical staffing, 24/7 NOC, and layered physical security.
• Owner Notes: Facilities with N+1 or 2N redundancy in power and cooling command premium rates. Typical capex for retrofit: $8–$12M per MW (Uptime Institute).

Edge Computing

• Pros: Strategic proximity to end-users; shorter permitting timelines; modular builds allow rapid market entry.
• Cons: Smaller tenant pool per site; ROI may require multi-site portfolio aggregation to appeal to investors.
• Owner Notes: Modular containerized designs can reduce deployment to 90–120 days. Edge operators often seek 5–10 year leases with expansion rights tied to demand growth (IDC).

Hyperscale Data Centers

• Pros: Very large, long-term leases (10–20 years); significant tenant-funded infrastructure investment; anchor credit quality often investment-grade.
• Cons: Limited tenant universe; long entitlement and build timelines (often 24–36 months); high land and utility capacity requirements.
• Owner Notes: Greenfield hyperscale campus development typically runs $7–$10M per MW shell/core delivery; tenant fit-out can add $3–$5M per MW (Data Center Dynamics).

Owner Considerations Across All Types

• Match lease structures to capital strategy: wholesale for stable cash flow, retail colo for higher margins, build-to-suit for low-risk delivery.
• Use CoStar or similar analytics to benchmark market absorption, vacancy, and rate trends in your target geography.
• Build ESG alignment into design—green certifications (LEED, BREEAM) are increasingly in RFP scoring and may be a tenant requirement.

5) Financial Models, Lease Structures & ROI

Data center financial models balance long-term tenant stability with capital recovery timelines, often structured to match the technical lifecycle of the infrastructure (10–20 years for core MEP systems).
Owners should align model choice with site type—retail colocation can yield higher margins per kW but requires more operational involvement, while hyperscale wholesale leases typically provide steady, lower-touch income streams.

Common Models

1. Wholesale Lease: Tenant leases entire building or data hall, handles interior fit-out; long-term (10–20 years).
   Typical rate: $110–$150 per kW/month in Tier-1 markets (CBRE).
2. Retail Colocation: Multiple tenants lease cabinets or cages; owner operates facility, provides shared infrastructure.
   Typical rate: $150–$250 per kW/month depending on redundancy and interconnection density.
3. Build-to-Suit: Tenant specs drive design/build; owner delivers a turnkey shell or partially fitted facility, often under a fixed-return agreement.

Revenue Levers

• Power Pricing: Charged per kW reserved and per kWh consumed, with escalations tied to utility rates or CPI.
• Cross-Connect & Interconnection Fees: Recurring fees for fiber/copper connections between tenants and carriers; high-density sites like carrier-neutral colos can significantly boost NOI.
• Ancillary Services: Remote hands, secure storage, compliance audits, and managed cloud on-ramps can each contribute 5–15% of total revenue (Data Center Dynamics).

Cost Drivers

• Electrical & Mechanical Systems: UPS systems, diesel gensets, chillers, CRAHs/CRACs—capex averaging $7–$12M per MW installed capacity (Uptime Institute).
• Network Connectivity: Diverse fiber entrances, carrier MRCs, and IRU agreements; often a major opex line item in lease modeling.
• Security Systems & Staffing: Multi-layered access control, biometrics, CCTV, 24/7 guards—critical for compliance with SOC 2, ISO 27001, PCI DSS, and other standards.

ROI & Owner Benchmarks

• Stabilization Timeline: Wholesale/hyperscale typically 12–24 months from lease execution; retail colo can take 24–36 months to fill cabinets.
• Target IRR: Institutional investors often target 8–12% for stabilized hyperscale, 12–18% for retail colo portfolios.
• Value-Add Triggers: Increasing interconnection density, adding megawatts, and improving PUE can raise asset valuation on resale (SiteBid Lease Management).

Pro Tip: Use SiteBid’s consulting services to run comparative pro forma models for wholesale, retail, and build-to-suit strategies, factoring in incentives, local utility rates, and tenant credit risk.

6) Site Readiness: Power, Cooling, Connectivity & Security

Site readiness is the foundation for attracting data center tenants and securing long-term, high-value leases.
In 2025, the majority of rejected site proposals fail during the due diligence phase due to insufficient utility capacity, lack of diverse connectivity, or inadequate physical security (Uptime Institute).
SiteBid helps owners score and benchmark properties against market requirements before engaging with prospective tenants.

Power

• Capacity: Minimum starting availability should align with target facility type —
  Edge: 0.5–5 MW,
  Retail Colo: 5–20 MW,
  Hyperscale: 50–300+ MW.
• Redundancy: Dual feeds from separate substations; N+1 or 2N redundancy for critical circuits.
• Upgrades: Documented utility upgrade path with timelines and cost-sharing opportunities.
• Learn more about hyperscale power planning.

Cooling

• System Design: N+1 or 2N mechanical systems; evaluate water-cooled vs. air-cooled based on climate, water pricing, and ESG goals.
• Efficiency: Target PUE (Power Usage Effectiveness) of ≤1.4 for competitive positioning (IEA).
• Heat Reuse: Explore heat recovery to adjacent buildings or district heating loops for ESG credits.
• Cooling strategies for colocation.

Connectivity

• Diversity: Two or more physically diverse fiber entrances; multiple carriers to avoid single points of failure.
• Proximity: Distance to carrier hotels, IXPs (Internet Exchange Points), and cloud on-ramp nodes significantly impacts tenant interest (Data Center Map).
• SLAs: Ensure service providers can commit to low-latency and high-availability agreements for mission-critical workloads.
• Get fiber route mapping with SiteBid Consulting.

Security

• Physical Layers: Perimeter fencing, anti-ram barriers, mantraps, biometric authentication, and 24/7 guards.
• Surveillance: 90–120 day CCTV retention; remote monitoring capabilities.
• Certifications: SOC 2 Type II, ISO 27001, PCI DSS, HIPAA (as relevant to tenant sectors).
• Security compliance management via SiteBid.

Owner Readiness Checklist

• Secure utility commitment letters with defined capacity and upgrade timelines.
• Document fiber availability, providers, and points of entry with as-built diagrams.
• Pre-approve generator permits and environmental reviews for cooling systems.
• Perform a SiteBid readiness assessment to identify gaps before tenant outreach (book a consultation).

Tip: Sites meeting Tier III/IV requirements for power, cooling, and connectivity not only attract higher credit tenants but can also command 10–20% higher lease rates in competitive markets.

7) Operations, Reliability & Compliance

A data center’s operational reliability is measured not just by its uptime statistics, but by the systems, staffing, and compliance frameworks in place to protect tenant workloads.
In 2025, facilities operating at Uptime Institute Tier III or IV standards remain the gold standard for enterprise and hyperscale tenants, with annual downtime allowances as low as 26–52 minutes for Tier IV sites.
SiteBid helps owners align operational protocols with tenant SLAs and industry benchmarks to maximize asset value.

SLAs & Uptime Targets

• Tier III: Concurrently maintainable; 99.982% uptime (annual downtime ≤1.6 hours).
• Tier IV: Fault tolerant; 99.995% uptime (annual downtime ≤26 minutes).
• Best Practice: Documented maintenance windows, redundancy testing, and real-time monitoring via DCIM platforms (Data Center Knowledge).
• Include SLA evaluation in your lease negotiations to match target tenant requirements.

Compliance Frameworks

• Security & Privacy: SOC 2 Type II, ISO 27001, PCI DSS, HIPAA for healthcare data.
• Energy & Sustainability: LEED/BREEAM certifications; participation in renewable sourcing programs (IEA).
• Operational Resilience: NIST SP 800-53 controls; NFPA fire/life safety compliance.
• Schedule a compliance gap analysis with SiteBid Consulting.

Owner Action Steps

• Develop a Critical Maintenance Calendar with redundancies to support concurrent maintainability.
• Implement 24/7 NOC monitoring with escalation protocols for power, cooling, and network events.
• Establish incident response playbooks covering cybersecurity, physical security, and utility failure scenarios.
• Document and test disaster recovery procedures at least annually; include joint drills with anchor tenants.
• Maintain updated compliance certificates and make them available in RFP responses to shorten deal cycles.

Tip: Facilities with documented Tier III/IV compliance and renewable energy sourcing have a competitive edge, with some markets seeing 5–10% higher lease rates for certified, green-powered sites (CBRE).

8) Risk Mitigation & Contract Safeguards

Risk management in data center leasing is about protecting asset value and uptime while ensuring tenant obligations are enforceable.
In 2024–2025, over 30% of U.S. data center project delays were tied to utility interconnection issues and permitting challenges (Data Center Dynamics).
SiteBid’s consulting services help owners identify vulnerabilities pre-lease and integrate risk-mitigation terms into agreements.

Utility Risk

• Capacity Lock-In: Secure binding agreements or letters from utilities guaranteeing the MW capacity and delivery timeline needed for tenant operations.
• Redundancy: Require dual utility feeds from separate substations or grid interconnections where possible.
• Contract Clause Example: Include a “Utility Delivery Milestone” clause with tenant remedies or step-in rights if capacity is delayed beyond a specified date.
• Hyperscale power planning guidance.

Disaster Risk

• Site Selection: Avoid floodplains, high seismic/liquefaction zones, and wildfire-prone regions; verify FEMA and USGS hazard maps (FEMA, USGS).
• Hardened Design: Specify wind load, fire suppression, and seismic bracing standards in the lease’s “Design Criteria” exhibit.
• Insurance Alignment: Require tenant to maintain property and business interruption coverage, naming landlord as additional insured.
• Disaster recovery management with SiteBid.

Tenant Credit Risk

• Credit Vetting: Obtain financial statements and credit ratings; prioritize investment-grade or heavily capitalized tenants.
• Security Instruments: Use letters of credit, parent guarantees, or substantial security deposits for non-rated tenants.
• Performance Triggers: Include clauses allowing for additional security if tenant financial condition deteriorates.
• Tenant credit evaluation service via SiteBid.

Exit & Decommission Risk

• Restoration Clauses: Require tenants to remove proprietary equipment and restore premises to agreed condition at lease end.
• Asset Transfer: Allow landlord to acquire certain tenant-installed infrastructure (generators, switchgear, chillers) at fair market value to retain site readiness for re-leasing.
• Environmental Clearance: Mandate removal of any hazardous materials, with third-party certification prior to lease expiration.
• Decommission planning consulting from SiteBid.

Owner Action Steps

• Develop a risk matrix mapping utility, disaster, tenant credit, and decommission risks with assigned mitigation measures.
• Work with SiteBid consultants and legal counsel to draft protective clauses early in LOI negotiations.
• Require annual risk review meetings with tenant to update disaster recovery, insurance, and credit documentation.

Tip: Landlords with robust utility delivery guarantees, disaster resilience designs, and creditworthy tenants often see higher asset valuations and reduced cap rate risk during sale or refinancing (CBRE).

9) Deployment Playbooks by Facility Type

Deployment strategies vary widely depending on whether you’re building a colocation facility, an edge site, or a hyperscale campus.
The right approach balances time-to-market, capex efficiency, and long-term scalability.
According to Data Center Dynamics, build timelines in 2024–2025 averaged 9–14 months for modular edge sites, 18–24 months for retail colocation, and 24–36+ months for hyperscale campuses.
SiteBid provides consulting and owner’s rep services to keep deployments on schedule and within budget.

Colocation Facilities

• Typical Timeline: 18–24 months (retrofit can cut to 12–18 months).
• Capex: $8–$12M per MW for retrofit; $10–$14M per MW for new build (Uptime Institute).
• Build Sequence:
  1. Secure property & zoning approval (Site readiness analysis).
  2. Finalize design & redundancy (N+1 or 2N).
  3. Order long-lead equipment (UPS, generators, chillers).
  4. Coordinate network entry & cross-connect rooms.
  5. Phase fit-out to match pre-lease commitments.

Edge Sites

• Typical Timeline: 9–14 months; modular/containerized builds can deploy in as little as 120 days.
• Capex: $5–$8M per MW (containerized lower, traditional build higher).
• Build Sequence:
  1. Site selection near target latency zones (edge computing site criteria).
  2. Utility & fiber availability confirmation.
  3. Permitting for generators, cooling, and security fencing.
  4. Deploy prefabricated modules; integrate with local utility and network providers.
  5. Commission & bring online with initial tenants secured.

Hyperscale Data Centers

• Typical Timeline: 24–36+ months (multi-phase builds can extend to 5–10 years).
• Capex: $7–$10M per MW for core/shell delivery; tenant fit-out $3–$5M per MW (CB Insights).
• Build Sequence:
  1. Land acquisition & entitlement (hyperscale requirements guide).
  2. Dedicated substation design & interconnection agreements.
  3. Phase 1 site grading, utility trenching, and road access.
  4. Core/shell build with parallel tenant-specific fit-out.
  5. Scale in phases to meet tenant MW ramp schedules.

Owner Execution Tips

• Lock in long-lead equipment orders early—lead times for generators and switchgear can exceed 12 months.
• Negotiate anchor tenant pre-leases to support construction financing and phase planning (SiteBid tenant engagement services).
• Use construction milestone clauses in leases to align delivery with tenant installation schedules.
• Plan for scalability—design site layouts for expansion without operational disruption.

Tip: Projects with phased delivery, anchor tenant commitments, and pre-secured power can reduce financing costs by up to 75 bps and shorten time-to-cash-flow (CBRE).

10) Marketing & Tenant Targeting

A strong marketing and tenant targeting strategy ensures your site reaches qualified decision-makers at the right time.
In 2025, tenant demand is dominated by cloud providers (35%), colocation operators (28%), and enterprise IT/hybrid cloud users (25%) (Data Center Dynamics).
SiteBid helps property owners position listings and marketing campaigns to match these demand drivers.

High-ROI Marketing Channels

• Direct Industry Outreach: Build relationships with acquisition teams at top hyperscale and colo operators via SiteBid’s managed outreach program.
• Broker Partnerships: Partner with carrier-neutral brokers specializing in mission-critical real estate.
• Trade Shows & Events: Attend high-traffic events like Data Center World, PTC, and NANOG to meet operators and investors face-to-face.
• Digital Visibility: List on SiteBid’s leasing marketplace and industry platforms like Data Center Map to maximize reach.

Tenant Profiling & Targeting

• Hyperscale Tenants: AWS, Microsoft, Google, Meta — focus on large-acreage, scalable power, and long-term lease terms.
  See hyperscale requirements.
• Colocation Operators: Equinix, Digital Realty, Cyxtera — value metro connectivity, interconnection density, and expansion rights.
• Enterprise & Hybrid Cloud Users: Fortune 1000, fintech, SaaS — prefer retail colo with managed services, compliance certifications, and cloud on-ramps.
• Edge Deployers: Content delivery networks, IoT platforms — prioritize low-latency sites with modular deployment capabilities.

Owner Action Steps

• Create a tenant targeting matrix mapping your site’s specs to ideal tenant profiles (start with a SiteBid lease analysis).
• Develop an offering memorandum that highlights power availability, fiber diversity, expansion capacity, and ESG alignment (SiteBid can prepare OM packages).
• Use multi-channel marketing — combine targeted LinkedIn campaigns, SiteBid marketplace listings, and broker networks.
• Track engagement metrics (inquiries, NDA requests, tours) to refine targeting and messaging.

Tip: Sites with professional marketing collateral, verified readiness reports, and active presence on industry platforms can shorten time-to-lease by 6–12 months compared to passive listings (CBRE).

Frequently Asked Questions

How much power do I need?

It depends on the target facility type and tenant profile:
Edge: 0.5–5 MW,
Retail Colo: 5–20 MW,
Hyperscale: 50–300+ MW.
Securing a SiteBid power readiness assessment early can confirm capacity and upgrade timelines with the local utility.

What is the average lease term?

Hyperscale leases typically run 10–20 years, retail colocation averages 5–10 years, and edge deployments often sign 5-year terms with expansion rights.
Longer terms can be secured with build-to-suit or anchor tenant agreements (see hyperscale lease guidance).

Do I need to own the building?

Not always. Many data center operators lease shells, industrial pads, or retrofit existing buildings.
Owners can partner via sale-leasebacks, ground leases, or joint ventures (SiteBid JV consulting).

How important is redundancy?

Critical. Power, cooling, and network redundancy directly impact tenant revenue and SLA compliance.
Facilities with Tier III/IV designs command higher lease rates and attract enterprise-grade tenants.

Can I convert an existing building?

Yes, but feasibility depends on floor loading, power access, cooling potential, and fiber connectivity.
A SiteBid conversion feasibility study can identify retrofit costs and market positioning.

What kind of return can I expect?

Stabilized IRRs vary: hyperscale wholesale typically delivers 8–12%, retail colo portfolios 12–18%.
Returns depend on lease structure, capital stack, and local market demand (CBRE Data Center Trends).

What certifications do tenants require?

Common compliance asks include SOC 2 Type II, ISO 27001, PCI DSS, HIPAA, and LEED/BREEAM for ESG alignment.
SiteBid can manage compliance programs to keep your asset competitive.

How do I find qualified tenants?

Target outreach to hyperscale, colocation, and enterprise acquisition teams, list on SiteBid’s leasing marketplace, and leverage industry directories like Data Center Map.
SiteBid offers tenant acquisition consulting to shorten time-to-lease.

How long does it take to lease a data center?

Time-to-lease varies: hyperscale deals can take 12–24 months from initial outreach, while retail colo and edge deployments may lease in 6–12 months if the site is ready.
Sites with documented readiness and incentives tend to close faster (order a readiness report).

Tip: Having a full readiness package — power letter, fiber maps, site plan, and compliance certificates — can cut lease negotiations by 30–50%.

Glossary

• Colocation: Multi-tenant data center leasing space, power, connectivity.
• Edge Computing: Processing data near the source for low latency.
• Hyperscale: Extremely large, scalable data center for major cloud/content.
• Tier Rating: Uptime Institute classification (Tier I–IV).

Next Steps & How SiteBid Can Help

SiteBid can assess your property’s suitability for data center development or conversion, connect you with operators, and guide lease negotiations. From colo retrofits to hyperscale campus planning, we align technical, financial, and operational requirements for success.

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