News Summary
Columbus, Ohio is experiencing a significant increase in data center construction, led by Amazon’s $10 billion investment in a 590-acre campus in Fayette County. The state’s data center industry is expanding rapidly, with around 190 centers already in operation. This growth is benefiting various sectors, including real estate and construction, and is expected to create numerous jobs. Experts predict rising competition for energy resources, affecting site decisions for future data centers, especially in rural areas and Northern Ohio.
Columbus, Ohio – A significant surge in data center construction is taking place across Ohio, with Amazon’s $10 billion investment leading the charge. The online retail giant plans to build a sprawling 590-acre data center campus in Fayette County, which is set to greatly enhance the state’s position in the booming data center industry. The increasing demand for data storage and processing capabilities is transforming Ohio’s economic landscape, benefitting various sectors including real estate, construction, and professional services.
Ohio is currently home to approximately 190 data centers, indicating rapid growth in the sector. The state has become particularly attractive for data centers due to its substantial farmland and availability of land in central and southern regions. Columbus, in particular, has 121 data centers, while the city of Cleveland hosts 24. This growth correlates with the rising demand from businesses requesting up to a gigawatt of power for data center operations, as outlined by experts in the field.
The construction of data centers, categorized as “hyperscale” operations, is particularly notable, demanding between 25 to 100 megawatts of power. A typical data center is estimated to cost around $10 million per megawatt utilized. This intense energy requirement translates into considerable job creation, as the construction of these facilities leads to hundreds or even thousands of construction jobs. Companies like Shook Construction have responded to this demand, expanding their workforce to over 520 employees.
According to a report from real estate firm CBRE, 95% of data-center clients are planning to increase their investments in projects this year. Additionally, about 41% of respondents have indicated intentions to allocate $500 million or more for further development of data centers. This trend highlights an escalating competition among data centers for large sites, particularly because they are contending with industrial buyers as well.
Energy Infrastructure
As competition intensifies, energy resources have become a critical factor affecting site decisions. For instance, a 500-megawatt load can serve approximately 400,000 homes, emphasizing the importance of efficient energy management. The increasing energy demands have prompted Ohio energy regulators to impose higher initial electricity charges for large companies, including Amazon and Google, to meet their power needs.
Experts note that some areas in rural southern Ohio offer attractive opportunities for new data centers due to fewer zoning restrictions. However, Northern Ohio faces challenges because of existing fiber infrastructure, which may inhibit its competitiveness in attracting data centers. As a result, Andrew Cvengros of JLL predicts that demand will rise in Northern Ohio as power limitations mount in Columbus.
Real Estate Market Dynamics
Real estate dynamics are also shifting due to the influx of data centers. Terry Coyne from Newmark has noted an increase in land sales for data center development, with prices showing significant escalation—rising from $27 million to $45 million within two years for a parcel of land sold. The demand for high-voltage infrastructure in Cleveland might present better opportunities for repurposing former industrial sites as data center locations, potentially catalyzing further growth in the region.
As data center demand grows, some construction firms are stepping up to meet the industry’s complexities. Gabe Sciarretti, executive director at Nexus Engineering Group, emphasizes the magnitude of the industry and the complexities involved. Nexus Engineering has reported an increase in work related to data center construction, helping manage utility backlogs resulting from the high energy requirements.
In conclusion, the data center boom in Ohio acts as a catalyst for economic development, enhancing job prospects across numerous sectors while representing a shift in real estate and energy demand dynamics. With significant investments from companies like Amazon and ongoing growth, it is clear that Ohio’s data center landscape is on the cusp of major expansion.
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Additional Resources
- Crain’s Cleveland Business
- The Columbus Dispatch
- USA Today
- The Washington Post
- About Amazon
- Wikipedia: Data Center
- Google Search: Data Centers in Ohio
- Google Scholar: Data Centers and Economic Impact
- Encyclopedia Britannica: Data Center
- Google News: Ohio Data Center Growth
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CLEVELAND STAFF WRITER The CLEVELAND STAFF WRITER represents the seasoned team at HERECleveland.com, your premier source for actionable local news and information in Cleveland, Cuyahoga County, and beyond, delivering "news you can use" with in-depth coverage of product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news impacting the region—backed by years of expert reporting and robust community input, including local press releases and business updates, while providing top reporting on high-profile events like the Rock and Roll Hall of Fame inductions, Cleveland International Film Festival, and holiday parades, alongside key organizations such as the Cleveland Clinic, Cleveland Orchestra, and Great Lakes Science Center, plus leading businesses in manufacturing and healthcare like Sherwin-Williams and University Hospitals, and as part of the broader HERE network including HEREDayton.com, offering comprehensive, credible insights into Ohio's vibrant landscape. HERE Cleveland HERE Dayton
