Hello everyone! Ed Socia, Insight Director of North America at datacenterHawk, together with Montana Myer, Senior Insight Analyst, took us through an invaluable journey in the third episode of our North American regional podcast. With the aim of enhancing decision-making around data centers, we discussed upcoming opportunities in North America and the changing dynamics of deal structures in the data center market.

Decoding Deal Structures

In the evolving North American data market, deal structures play a critical role in shaping agreements between parties. These structures outline terms such as lease durations, pricing models, and flexibility, which are especially important in colocation leases. Understanding the nuances of deal structures helps businesses navigate negotiations more effectively and align agreements with their operational needs.

Unraveling the Traditional to the Emerging

In the conventional data center lease market, the most prevalent deal structure has been the modified gross type. This essentially includes an agreed asking rate between the provider and the tenant plus a monthly energy cost. However, as Montana pointed out, there seems to be a shift taking place within the market. The emergence of new deal structures is a notable area of exploration.

Navigating the Shift in Deal Structures

Diving deeper into understanding this shift in deal structures, it becomes clear that the market is heading for more sophisticated models. We are starting to see more shell deals and yields on cost being signed, pointing towards an emerging trend.

Opportunities on the Horizon

As these new trends take shape in the market, it makes one ponder about the potential opportunities this shift could bring. As evident from our discussion, there appears to be a rising number of opportunities presenting themselves as the data center market continues to evolve.

In conclusion, we at datacenterHawk are committed to providing you with the most insightful trends and knowledge in the data center real estate market. Our platform, backed by an experienced team, is designed to provide you with the data center real estate intelligence you need to make informed decisions. Tune into our podcasts, explore our blog posts, and let's navigate the data center real estate frontier together!