BarbriSFCourseDetails

Course Details

This CLE webinar will examine the increased demand for data centers and the impact on the commercial real estate industry, specifically sales transactions. The panel will address unique due diligence issues for developers and contractual provisions that should be included in the purchase agreement to mitigate the types of risks associated with purchasing land or already existing buildings for data center development.

Faculty

Description

Soaring demand, including the rise of artificial intelligence, is driving the development of new data centers and significantly impacting the commercial real estate industry. Given the nature of the business and building requirements, data center developers purchasing real estate have unique due diligence considerations and contractual needs of which counsel should be aware.

For example, data centers have high power and water needs. Therefore, part of the property selection process includes assessing average and peak demands and negotiating with local utility providers to ensure adequate supply and infrastructure for the data center needs as well as verifying that local laws allow for sufficient consumption. Securing the necessary environmental permits and conducting the required environmental studies are also important, as well as reviewing title and survey documents to ensure all necessary rights and access are secured since data centers often require specific easements such as those for fiber-optic cables.

In addition to addressing the above needs in the purchase agreement, counsel should also include provisions to mitigate risks faced by data centers that make them particularly susceptible to the impact of outside events including natural disasters, governmental actions, and permitting issues, as well as heightened security concerns. 

Listen as our expert panel discusses issues unique to real estate purchases related to data center development. The panel will address necessary due diligence considerations and unique contractual provisions to mitigate client risk.

Outline

I. Introduction

A. The increased demand for data centers

B. Purchasing land vs. an existing building

II. Due diligence considerations

A. Land requirements and zoning

B. Encumbrances, easements, and land use limitations

C. Utility needs

D. Environmental concerns

E. Financial and tax considerations

F. Others

III. Purchase and sale agreements

A. Access rights

B. Force majeure clauses

C. Assignment of obligations

D. Default provisions

E. Casualty and liability

F. Environmental requirements

G. Others

IV. Practitioner takeaways and best practices


Benefits

The panel will review these and other important issues:

  • Why is there an increase in data center development, and how is this impacting the commercial real estate industry?
  • What due diligence considerations face counsel and clients when purchasing real estate for data center development? How do these differ when purchasing land vs. property with an existing building to be converted into a data center?
  • What unique risks are related to data centers? What provisions should be included in the purchase agreement to mitigate those risks?