Ground Rules: How to Choose the Perfect Site for Your Next Data Center
By Daniel Wruble | Data Center Resources | May 2025
You don’t build a cathedral on shifting ground. And you don’t build a data center just anywhere.
As the digital economy expands at lightspeed — fueled by AI, streaming, and smart everything — the humble data center has become a silent superpower. But here’s the catch: no two locations are created equal. In fact, choosing the right site might be the most important decision you’ll make.
Whether you’re a first-time developer or a seasoned infrastructure player, site selection is where vision meets viability. It’s where power, policy, and performance intersect. And in today’s landscape, it’s more competitive than ever.
Let’s break it down.
1. Power Is Everything (And It’s Getting Harder to Find)
Data centers are ravenous beasts when it comes to energy. A single 100 MW hyperscale facility can consume as much power as 80,000 homes. But getting that power to your site? That’s a whole different beast.
In major markets, utilities are overwhelmed. Developers in Texas, Georgia, and Virginia are facing multi-year delays just to secure interconnects or get in the queue for new substations. In fact, some projects are stalling before shovels hit the dirt — not because of permitting or funding, but simply because the grid can’t support them.
What to look for:
Proximity to substations and high-voltage transmission lines
Existing or upgradeable utility infrastructure
Transparent power queue data from local utilities
Case in point: In 2024, a 70 MW data center project in Nevada was halted for 18 months because the nearest transmission line had no available capacity — and upgrading it required coordination between three different utility companies.
Pro tip: Start utility conversations early. Don’t just ask “Can I get 50 MW?” Ask when, and at what cost. Delays in grid connection are the single most overlooked risk in site selection.
2. Fiber First: Connectivity Is the Currency of Uptime
Data centers don’t just store data — they move it. At scale. That’s why fiber is just as important as power.
A strong data center site needs multiple high-capacity fiber routes, preferably from more than one carrier. Carrier-neutrality ensures flexibility and competitive pricing. Redundancy ensures uptime. If your site has only one backhaul route and a dig crew cuts the line five miles away, your entire facility could go dark.
Connectivity considerations:
Access to dark fiber and lit services
Redundant paths (ideally geographically diverse)
Proximity to peering exchanges or landing stations
Example: Hillsboro, Oregon rose to prominence because it sits on a Pacific landing point for transoceanic cables — giving developers fast access to Asia and Silicon Valley. Today, it’s one of the top 5 data center markets in the U.S.
Did you know? A latency difference of just 10 milliseconds can translate into millions in lost revenue for companies in gaming, trading, or live-streaming sectors.
3. Zoned In: Not All Dirt Is Ready to Dig
You found flat, affordable land. Great. But can you build on it?
Many developers underestimate how long it takes to rezone land or push a project through municipal approval — especially if the region has never hosted a data center before. Some cities love them. Others are starting to push back due to concerns over water, noise, and energy usage.
Key checks:
Confirm industrial or special-use zoning
Evaluate height restrictions, easements, and setbacks
Know the city and county’s attitude toward data centers
Real-world pitfall: In 2023, a project in Loudoun County, Virginia was delayed after citizen groups challenged new data center permits — even though the area had been a hotspot for years. The community sentiment had shifted.
Lesson: Meet with city planners, not just brokers. A site’s legal path to development is just as important as its physical attributes.
4. Climate & Cooling: Chill Pays the Bills
Cooling accounts for 30–40% of a data center’s energy use. That means climate can make or break your OpEx.
Colder climates allow for free-air cooling, reducing the need for mechanical systems. Low humidity helps avoid corrosion. Even slight seasonal variations can swing your power bill dramatically.
What to look for:
Year-round average temperatures
Humidity patterns and particulate risk
Opportunity for heat recapture or sustainable cooling systems
Comparison: A 10 MW facility in Phoenix may spend up to 20% more annually on cooling than a comparable site in Portland — simply due to climate.
Emerging trend: Some data centers are using waste heat to warm nearby buildings, turning a liability into a sustainability win. This works best in colder climates where heat is in demand most of the year.
5. Disaster-Proof Your Facility
Redundancy starts with geography. Natural disasters — floods, quakes, fires, or storms — are becoming more frequent and more intense. Downtime can cost thousands (or millions) per minute, especially for high-frequency trading, healthcare, or cloud-hosting clients.
Risk factors to avoid:
FEMA flood zones
High seismic activity
Tornado or hurricane belts
Wildfire-prone regions
Example: After a wildfire disrupted power lines near a facility in Northern California in 2022, the operator had to run on diesel backup for 10 days. The PR and carbon cost were substantial.
Tool to use: Cross-reference potential sites with FEMA hazard maps, USGS seismic data, and historical weather patterns. Safety isn’t sexy, but it’s profitable.
6. Water Wars: The Next Data Center Bottleneck
With the rise of liquid cooling for HPC and AI-intensive loads, water is becoming an urgent factor in site selection.
Questions to ask:
Is there sufficient municipal water supply?
Are there groundwater rights or reuse options?
Are drought regulations tightening in the region?
In the news: Utah and Arizona have both paused or denied permits to new data centers due to water concerns. In some jurisdictions, developers must now build closed-loop or dry-cooled systems to win approval.
Sustainability matters: Regulators, investors, and customers are watching. Sites with access to reclaimed or recycled water will have the edge going forward.
7. Incentives: Nice to Have — Not a Deal Maker
Yes, tax breaks are helpful. But they shouldn’t override poor fundamentals like limited power or lack of fiber.
That said, some regions roll out very attractive incentive packages:
Property tax abatements
Sales tax exemptions on equipment
Job training or infrastructure grants
Example: In 2023, Ohio landed a $1B hyperscale facility with a blend of state tax relief, local job credits, and expedited permitting.
Cautionary note: Incentives often come with strings. Be wary of clawback clauses or job-creation metrics you can’t sustain.
8. The Long View: Future-Proofing Your Investment
A great site doesn’t just work now — it scales with you.
Future-ready sites offer:
Expandable power and fiber infrastructure
Room for modular build-outs or campus-style growth
ESG-compliant design options
Access to skilled labor pools
Trend to watch: With AI, quantum computing, and HPC workloads rising, power densities are going up. What was “enough” five years ago may be inadequate by 2027. Developers who plan for 2–3x density today will stay ahead of the curve.
Bonus: Think about exit strategy. Investors and REITs increasingly value infrastructure-ready, permitted land parcels. Build flexibility into your entitlement package — it will pay off later.
Closing Thoughts: Build Where It Matters Most
Site selection is more than a real estate decision. It’s a blueprint for everything that follows — your build timeline, your energy profile, your client base, and your long-term growth.
The smartest developers ask the hard questions early. They engage utilities, cities, and engineering teams before they sign a single LOI. And they plan not just for the next tenant — but for the next 10 years.
Bookmark This:
Coming soon — our downloadable Site Selection Checklist and Top 10 Questions to Ask Your Utility Provider.
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Need help evaluating your next land deal? Contact the team at Data Center Resources — where power meets possibility.
