GlobeSt.com Features Marc Epstein in Q&A on Data Center Deals
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Akin Gump real estate partner Marc Epstein has been featured by GlobeSt.com in the article “No Signs Of Data Center Demand Waning.” In the article, Epstein spoke about the demand for data centers, how data center transactions differ from other assets and data centers’ future prospects.
Epstein began by noting that working on a data center deal means being cognizant “of much more than just real estate issues. Much more than title and survey.” Equally important, he said, is an understanding of the key technologies, since a data center “really marries real estate with technology.”
Based in Akin Gump’s Fort Worth, Texas, office, Epstein said the Lone Star State is a popular location for data centers because of “a thriving economy, generous tax incentives, cheap energy prices, and a large and educated workforce. Another significant factor,” he said, “is that approximately 90 percent of Texas is powered by its own electrical grid, the Electric Reliability Council of Texas/ERCOT system.”
Epstein also discussed the following:
- What makes data center deals different from other transactions? “In most instances, the rent paid by data center tenants is based on electrical capacity rather than square footage, and two, the importance of the services the landlord provides and the quality of the data centers operations.”
- What issues should you be looking for when doing due diligence on this type of deal? “You need to keep a keen eye out for any items that would interfere with operations within the data center and risks that could put the equipment, which is millions of dollars, within a data center at risk. Gas pipelines within the property are obvious concerns, but any nearby railroads, drill sites, airports or industrial facilities that could produce significant vibrations can also interfere with the operations of a data center.”
- Do you expect more development of data centers in 2018? “As our economy continues to shift towards cloud-based electronic storage, and data storage and analytics, the demand for data centers, i.e., wholesale, retail and co-location facilities, should continue to increase.”
