Data Center Real Estate - Andy White
May 2, 2025
The rapidly growing data center market is projected to expand at an 11% annual rate and become a $600 billion industry this year. Andy White, chair of Winston & Strawn’s Real Estate group, delves into the exponential growth of data center transactions and their increasing notional value. Learn about the multifaceted legal teams involved in these projects, including real estate, private equity, fund formation, and energy attorneys, and discover how data centers are moving beyond traditional hotspots like Northern Virginia and Silicon Valley to new markets such as Iowa and rural Texas.
Global data center market is expected to grow
at almost 11% compounded annual.
It's also expected to be a almost $600 billion industry
this year alone with respect to developments.
My name is Andy White.
I'm a partner in the Chicago office of Winston & Strawn
and I chair our real estate.
Data center market is one of the most fastest growing
asset classes in all of the state.
Just in the last couple of years,
the volume of transactions, the notional value
of those underlying transactions has grown exponentially.
This asset class tends to take on multi-facets
of attorneys, project teams, et cetera,
with respect to how we're staffing
and structuring our deals for our clients.
One of the areas we pay particular attention to
in our real estate practice is the general acquisition
and development of these projects.
Data center projects, while having a notional value
that typically exceeds that of other asset classes
to a large multiple, tends to ultimately rely
on some of the same fundamentals in real estate
that traditional transactions do,
including title and survey review,
zoning analysis, and environmental.
We typically represent investors in data center projects,
operators of those data center projects,
and at times in the past, represented families
and family offices that have sold
or contributed land into data center developments.
One of the interesting parts about data center transactions
is the inclusion of energy and infrastructure.
Typically, data center transactions involve
multiple teams of attorneys,
including real estate attorneys, private equity attorneys,
fund formation attorneys,
and energy and infrastructure attorneys as well.
One myth that's interesting and worth trying to dispel
a little bit based on the experience
and transactions we've seen recently
is that data centers need to be developed
in some of the traditional data center hotspots,
such as Northern Virginia, Silicon Valley,
Dallas, and Chicago.
What we've typically seen is the sheer growth
and volume of these transactions
is necessitating the use of land, resources,
and opportunities in markets that typically
and traditionally have not held
large real estate investment transactions
and or data center transactions,
including Iowa, areas outside Atlanta,
some areas in rural Texas, and other places.
For example, we recently worked with a family
owning a large tract of land in the Southern Dallas area.
This family contributed their property
to a joint venture with a data center operator
and are working in tandem with that data center operator
to develop a fairly large transaction.
We're also typically seeing governmental end users
being more focused on where and how their data is used
and where it's housed, which could possibly
require data centers to be more urban in nature
in the coming years.
We encourage you to view this
and some of our other Winston Minute videos as well
and look forward to staying in touch with you
if you have any questions on this industry.