Data center due diligence is the specialized investigation process for evaluating potential data center sites and existing facilities. It goes beyond standard commercial real estate due diligence to include detailed analysis of power infrastructure, fiber connectivity, cooling resources, environmental constraints, and the regulatory landscape specific to mission-critical technology facilities.
The most critical element of data center due diligence is power. This includes: utility provider capacity and reliability history, distance to and capacity of nearest substation, interconnection timeline and cost estimates, redundancy options (dual feed, on-site generation), power purchase agreement terms, and renewable energy availability. A site with ideal location but insufficient power delivery timeline is effectively unusable.
Data centers generate enormous heat and require significant cooling resources. Due diligence must assess: water availability and cost for evaporative cooling, ambient temperature profiles for free cooling potential, groundwater regulations, air quality considerations for air-cooled facilities, and environmental permits required for cooling tower operations. Climate conditions directly impact operating costs.
Data center zoning varies dramatically by jurisdiction. Due diligence must confirm: permitted use under current zoning, noise ordinance compliance (generators, cooling equipment), height and setback requirements, building code requirements for critical infrastructure, local government attitude toward data center development, and any moratorium or restriction trends. Some jurisdictions actively court data centers while others resist them.
Data center site selection is the process of identifying and evaluating locations for new data center facilities based on power availability, fiber connectivity, water resources, zoning compatibility, natural disaster risk, labor markets, and tax incentive programs. With the explosion of AI compute demand, data center site selection has become one of the most competitive and time-sensitive activities in commercial real estate.
AI data center development refers to the full lifecycle of planning, designing, and constructing data center facilities optimized for artificial intelligence workloads. AI data centers have fundamentally different requirements than traditional facilities — higher power density per rack, more sophisticated cooling systems, and infrastructure designed for GPU clusters rather than conventional servers.
Environmental due diligence is the investigation of environmental conditions and risks associated with a commercial real estate property or development site. It encompasses contamination screening, flood zone assessment, wetland delineation, hazardous materials evaluation, regulatory compliance review, and Phase I/II Environmental Site Assessment coordination. AI tools have accelerated the initial screening phase dramatically.