Data Center Leasing Strategies: Financing Considerations, Key Lease Provisions, Trends and Developments

This CLE course will discuss the complex legal and business issues involved in data center lease agreements and the unique, critical provisions for these leases. The panel will provide practical guidance for financing and structuring these agreements from the perspective of both the data center landlord and tenant.

Data centers are one of the fastest growing asset classes in commercial/industrial real estate. Typical commercial lease provisions are inadequate for these types of spaces, thus industry-specific lease provisions and documentation are critical. In addition to the real estate aspects of these transactions, data center leases require an understanding of the equipment and technology in use and the complex legal issues that arise.

These leases must address rent calculation (square footage vs. power usage), space alterations, critical power and cooling requirements, assignment and subletting rights, non-disturbance protection, access security (virtual and physical), continual fiber connectivity, expansion and renewal options, and risk mitigation.

A key ancillary agreement to a data center lease is the service level agreement. Well drafted service level agreements not only address the current level of anticipated service but also outline what will happen when the unexpected occurs, relationships break down, or the parties need to make additions, deletions, and modifications to the service levels.

Listen as our authoritative panel of real estate practitioners reviews the legal and business issues inherent in data center lease agreements, unique lease provisions for these leases, and best practices for drafting appropriate service level agreements. The program will discuss the issues from the perspectives of both landlord and tenant.