Virginia: Prime Location for Data Centers and How to Finance Your Next Data Center Fast
Kyl Roelofs • September 27, 2024
Virginia has emerged as a global leader in the data center industry, offering a combination of strategic advantages that make it an ideal location for digital infrastructure. For investors and developers seeking to capitalize on this booming sector,
commercial hard money loans
and private funding can act as a powerful financing option. This article explores why Virginia is a top choice for data centers, the profitability of these facilities, and how hard money loans can facilitate your next data center project in the state.
Why Virginia is a Prime Location for Data Centers
Virginia, particularly Northern Virginia, has become the epicenter of the data center industry. Several factors contribute to this status:
- Robust Fiber Infrastructure: Virginia hosts the largest data center market globally, with over 35% of all known hyperscale data centers located in the state. This is largely due to its dense fiber-optic network, a legacy of early federal investments in telecommunications infrastructure.
- Affordable and Reliable Power: The state offers competitively priced electricity, which is crucial for energy-intensive data centers. Dominion Energy, serving much of Virginia, reported a 32.3% rise in adjusted operating earnings in its Virginia segment, attributing this growth to increased energy demand from data centers. Reuters
- Favorable Tax Environment: Virginia provides tax incentives for data center operators, including exemptions on sales and use taxes for qualifying equipment, making it financially attractive for data center development.
- Strategic Location: Situated on the East Coast, Virginia offers proximity to major population centers and government agencies, reducing latency and improving service delivery for data center clients. Brightlio - Technology Iluminated
The Profitability of Data Centers
Investing in data centers can yield substantial returns:
- High Demand: The global data center market was valued at $214 billion in 2023 and is projected to reach $406.6 billion by 2030, with a compound annual growth rate (CAGR) of 9.60%. NextMSC
- Stable Cash Flows: Data centers often secure long-term contracts with clients, ensuring steady revenue streams. According to McKinsey & Company, data centers offer steady, utility-like cash flows and risk-adjusted yields. McKinsey & Company
- Investor Interest: In 2021, there were 209 data center deals with an aggregate value of over $48 billion, indicating strong investor confidence in the sector. McKinsey & Company
Financing Data Centers with Commercial Hard Money Loans
Traditional financing methods meay not always be suitable for data center projects, especially when quick funding is required. Commercial
hard money loans
offer an alternative:
- Quick Access to Capital: Hard money loans are typically approved faster than traditional loans, enabling investors to seize opportunities promptly .
- Asset-Based Lending: These loans are secured by the property itself, making them accessible to borrowers who may not meet conventional lending criteria .
- Flexible Terms: Hard money lenders often offer more flexible terms, accommodating unique project requirements
Ready to Build Your Next Data Center?
Virginia's strategic advantages make it an unparalleled location for data center development. The state's robust infrastructure, favorable tax policies, and strategic location contribute to its status as a global data center hub. Coupled with the profitability of data centers and the availability of flexible
financing
options like commercial hard money loans, investors are well-positioned to capitalize on opportunities in this thriving sector. If you're considering investing in a data center project in Virginia, contact us today to get start on securing private hard money financing for your next facility. We have a simple and straightforward application process, with competitive rates, and lightning fast funding turnaround times.
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