Caleb Tennis Eminent domain is not an issue

April 13, 2012 by · Leave a Comment 

I recently read a short post by another data center that discussed the need to think about eminent domain and how it may impact your data center. The idea was that if the data center facility is located near railroad tracks, highways, or other certain utilities there may be a risk of seizure of property by the authoritative body in order to expand those services.

Yes, this probably does happen, but I would image fairly infrequently. Plus, the governing body would have to pay a reasonable sum for the property, and that isn’t going to be a small amount of money for a data center facility. I think in general, data centers are safe.

However, it does bring up another good topic: ownership of the building. You see, a nasty little secret of almost every colocation data center out there is that they don’t own the building they occupy. Our informal and unscientific calculations say at least 80% of colocation data center operators do not own their own facilities.

What this means to you, as an end customer, is that you’re at the mercy and whim of a landlord on top of your provider. While many of the facilities are on triple net leases, it’s not uncommon for the landlord to drastically raise rent when the lease comes up – and that cost gets directly passed on to the end customer.

As well, the tenant is always at risk if the landlord wishes to change ownership, or repurposes other parts of the building.

I say eminent domain is not an issue in the data center world; non-tenant owned facilities present a much larger threat to an end client.

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Data Cave is a privately owned and operated Tier IV data center located in Columbus, Indiana convenient to Indianapolis, Louisville and Cincinnati. Please contact us for more information at 866-514-2283.

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