The quick-turn, plan-lease-build-sell cycle of a stabilized asset strategy also benefits initial investors, who earn returns faster, and new investors in the stabilized assets, who enjoy a steady, long-term investment with tenants who generally have long-term leases in place. The strategy also allows developers, management companies and investors with different risk profiles to participate in the space — while focusing on what they do best. How EY can help TMT Strategy Consulting EY-Parthenon TMT Strategy Consulting teams can help identify growth and digital infrastructure opportunities. Learn more. Read more Even though stabilized asset sales have long been a staple in real estate development, there are unique potential pitfalls in data center development that can derail a service’s potential, either by slowing construction or sale or limiting returns.

The EY team’s multidisciplinary approach provides end-to-end support to companies involved in the data center market, covering everything from development or acquisition to monetization. The team’s experience and in-depth knowledge can guide both developers and investors throughout the three critical stages of a stabilized asset sale — structure, formation and exit.

Data center development stage 1 — creating a proper The structure or economic arrangement of a service is critical to creating a successful foundation. Loan terms and covenants, debt service coverage ratios, equity and reserve requirements, and proper tax planning all must be carefully considered. It’s also important to understand prepayment penalties and refinancing options, should the need arise. there are numerous elements of the economic structure that can make or break a data center service, a well-thought-out structure can strengthen the service’s viability and create a more favorable investment opportunity, which is critical for developers looking to move quickly with a stabilization strategy. By working carefully through financial planning and contract creation, developers can ensure that the service has a solid footing that can support leasing and construction through stabilization. Understand how the service’s financial structure will impact construction, leasing and exit strategies. Take time to develop a financial plan and associated contracts that can support and protect all parties. Work with the end in mind. Make sure your financial arrangements support the exit strategy so there are no surprises.

Data center development stage 1 — creating a proper structure

The structure or economic arrangement of a service is critical to creating a successful foundation. Loan terms and covenants, debt service coverage ratios, equity and reserve requirements, and proper tax planning all must be carefully considered. It’s also important to understand prepayment penalties and refinancing options, should the need arise.

Because there are numerous elements of the economic structure that can make or break a data center service, a well-thought-out structure can strengthen the service’s viability and create a more favorable investment opportunity, which is critical for developers looking to move quickly with a stabilization strategy. By working carefully through financial planning and contract creation, developers can ensure that the service has a solid footing that can support leasing and construction through stabilization.