Michael Rechtin and Michael Merar to Present Strafford Webinar “Data Center Development: Specialized Security, Communications, Cooling, and Power Needs; Service Agreements”

Michael Rechtin, partner in Seyfarth’s Real Estate department and chair of the firm's Data Center Services practice, and Michael Merar, partner in Seyfarth’s Real Estate department, will present the Strafford webinar “Data Center Development: Specialized Security, Communications, Cooling, and Power Needs; Service Agreements” on July 22, 2021.

Program Description

This webinar will address the issues associated with the development, operation, and financing of data centers. The panel will discuss features that make data centers unique--including power usage, connectivity, temperature and humidity controls, and security--and the need for proper service level agreements between the appropriate stakeholders.

Data centers have been developed (or existing buildings converted) so rapidly in recent years that they have emerged as a new real estate product type. There are physical features and operational issues unique to data centers that counsel and developer clients must address before proceeding with a data center project.

Data centers are more than just leased space. The owner must supply an uninterrupted source of power, climate control, including temperature and humidity controls, connectivity, wiring, build-out, and security. As such, they are significantly more expensive to build and maintain than standard offices or industrial facilities. Data centers house systems critical to the functioning of the businesses they serve, so counsel must address liability for any service interruptions and related insurance coverage.

The operating document for a company that occupies part of a data center is typically a service agreement or a license to use certain facilities within a designated space, rather than a lease. Data centers present unique challenges for underwriters looking to finance data center projects.

The panel will discuss issues associated with the development, operation, and financing of data centers and outlines the necessities in both leases and service level agreements

The panel will review these and other important issues:

• What are the distinct characteristics of data centers, and how do they affect development costs?
• How do the non-space-related needs of a data center (power, environmental, security) impact rent and the landlord's potential liability?
• How do service license agreements and leases differ when used for a data center?
• Why is financing a data center more difficult than more conventional property types?