Data centers give rise to various challenges in real estate. As the information age continues to ignite, there is rising demand for data speed, uninterrupted power, storage, and safety, which creates complex management, regulatory, and compliance issues.

Legal professionals addressing data center real estate needs must be well-versed in sophisticated real estate transactions as well as in the specific issues that face this unique business infrastructure. The on-demand nature of the business increases the effect of issues like access, defaults, or the time required to install or remove equipment. Power outages that last even milliseconds can have serious repercussions. Termination rights, remedies, and damages can all pose critical points of contention. These issues must be carefully negotiated to meet each party’s business standards.

We can handle anything from the planned acquisition or lease of a data center facility to unanticipated emergencies and crisis management. Our ability to meet the needs of both small-scale and large-scale operations gives our clients peace of mind.

Jackson Walker’s Data Center team have the depth and breadth of knowledge to assist clients with all aspects concerning  data centers. From real estate to cybersecurity needs, we’ve got it covered. Some examples of our work in the field include:

  • Representation of one the nation’s largest owners of data centers regarding multiple sites in Texas on all aspects of data center siting, including: water supply, wastewater discharge, power purchase agreements, tax abatements, land use and zoning, real estate and title issues.
  • Advised and negotiated the electric utility facilities extension agreement and easements for a $500 million data center to be built in Central Texas, including work on tax abatement and economic development agreements for the site.
  • Represented a client in the closing of six multi-million dollar data center acquisitions or purchases of real property for data center construction, which transactions included contract preparation and negotiation, due diligence, closing documents, and post-closing matters.
  • Represented a data center owner regarding sourcing raw water for site cooling purposes, including evaluation of alternative water supplies from groundwater sources and permitted surface water sources.
  • Represented a major electric generating facility to amend its NPDES wastewater discharge permit to incorporate modifications regarding its cooling water intake structure, including changing the location of the intake from a river location to an upstream lake.
  • Represented a client with strategy development regarding the compliance with Clean Water Act §316(b) and TCEQ regulations to successfully obtain permit amendment without the delays associated with a contested case hearing.
  • Represented an industrial operation to successfully obtain a major amendment to a NPDES wastewater discharge permit to authorize the construction and operation of a commercial centralized waste treatment facility on the client’s industrial site near the Houston Ship Channel.
  • Represented an electric cooperative in the negotiation of a partial requirements power purchase agreement, a peaking block purchase agreement and a combined cycle block purchase agreement.
  • Represented a consortium of electric cooperatives in the negotiation and documentation of 300 MW of purchases from a combustion turbine plant under multiple tolling agreements.
  • Handled water rights diligence for an infrastructure investment firm in connection with its acquisition of several private water utilities.
  • Represented a client with the preparation of a data center lease for a large tenant with an international presence.
  • Represented a major electric power company, as tenant, in successful negotiation of 10,000 square foot data center lease in west Houston. The lease involved landlord’s construction of a new data center facility, which necessitated the overlay of build to suit concepts with the technical service level provisions unique to data center leases.
  • Represented an operator of data centers in the development of a state-of-the-art data center in Houston, including the acquisition of the land, the construction, architectural, and engineering agreements, and financing.
  • Site acquisition and due diligence
  • Data server and equipment ownership, access, and removal rights
  • Expansion, contraction, and modular flexibility
  • User and rental service agreements
  • Options to extend and terminate
  • Tier level options
  • Green grid efficiency
  • Indemnities, waivers, warranties, cost containment
  • Privacy and data security audits. policies, and procedures
  • Data breach prevention and notification
  • Data center financial, regulatory, risk, and tax management
  • Compliance and government investigations