Data Center Investment in Boston
Boston's data center market is tight. Power constraints and permitting headaches keep supply in check while AI workloads drive demand through the roof. Cap rates compressed 75-100 bps over the past 18 months. Hyperscale deals are scarce - most inventory is enterprise colocation with 5-15MW capacities. The city's biotech boom creates unique demand patterns. Labs need low-latency connections but don't consume massive power like crypto or AI training. Edge facilities are popping up in suburbs to serve this market.
Market Context
Cap Rate Range
4.75%-6.25% for stabilized facilities, premium colocation trades below 5%
Current Vacancy
Sub-5% market-wide, practically zero for quality facilities with available power
Rent Trend
Colocation rates up 15-20% YoY, wholesale power trending $85-110 per kW monthly
Absorption
Strong absorption of 35-40MW annually, constrained by new supply delivery
Price Per Unit Trend
Price per MW hitting $8-12M for turnkey facilities, land values doubling in power-rich zones
Transaction Volume
$1.2B in trailing 12 months, up 40% from 2024 despite limited inventory
Submarket Analysis
Route 128 Technology Corridor
4.75%-5.5% capVacancy
2-3%
Avg Rent (1BR)
N/A - Enterprise colocation $95-120/kW monthly
Strongest fundamentals. Proximity to biotech campuses drives consistent demand.
OM Tip
Highlight tenant mix - life sciences companies pay premium for reliability and pay on time.
Downtown/Financial District
5.25%-6% capVacancy
3-5%
Avg Rent (1BR)
N/A - Premium colocation $110-140/kW monthly
Limited expansion capability but stable financial services demand.
OM Tip
Emphasize fiber density and carrier neutrality. Include utility rate lock details.
Burlington/Woburn
5%-5.75% capVacancy
1-2%
Avg Rent (1BR)
N/A - Wholesale $75-95/kW monthly
Best power availability. New hyperscale interest emerging.
OM Tip
Power capacity is everything here. Detail utility relationships and expansion rights.
Cambridge/Somerville
4.5%-5.25% capVacancy
Under 1%
Avg Rent (1BR)
N/A - Edge facilities $120-150/kW monthly
Supply constrained by zoning. Edge demand from biotech and universities.
OM Tip
Permitting timeline is 18-24 months. Existing facilities trade at huge premiums.
Outer Route 495
5.5%-6.25% capVacancy
5-8%
Avg Rent (1BR)
N/A - Wholesale $65-85/kW monthly
Development pipeline concentrated here. Power costs lower but latency higher.
OM Tip
Include drive times to major employment centers. Fiber connectivity plans matter.
Performance by Vintage
0
P
1
r
2
e
3
-
4
2
5
0
6
1
7
0
8
9
f
10
a
11
c
12
i
13
l
14
i
15
t
16
i
17
e
18
s
19
20
s
21
t
22
r
23
u
24
g
25
g
26
l
27
e
28
29
w
30
i
31
t
32
h
33
34
p
35
o
36
w
37
e
38
r
39
40
d
41
e
42
n
43
s
44
i
45
t
46
y
47
48
a
49
n
50
d
51
52
c
53
o
54
o
55
l
56
i
57
n
58
g
59
60
e
61
f
62
f
63
i
64
c
65
i
66
e
67
n
68
c
69
y
70
.
71
72
P
73
U
74
E
75
76
o
77
f
78
t
79
e
80
n
81
82
a
83
b
84
o
85
v
86
e
87
88
1
89
.
90
6
91
.
92
93
M
94
a
95
n
96
y
97
98
l
99
a
100
c
101
k
102
103
N
104
+
105
1
106
107
r
108
e
109
d
110
u
111
n
112
d
113
a
114
n
115
c
116
y
117
.
118
119
2
120
0
121
1
122
0
123
-
124
2
125
0
126
2
127
0
128
129
b
130
u
131
i
132
l
133
d
134
s
135
136
h
137
i
138
t
139
140
t
141
h
142
e
143
144
s
145
w
146
e
147
e
148
t
149
150
s
151
p
152
o
153
t
154
155
-
156
157
m
158
o
159
d
160
e
161
r
162
n
163
164
i
165
n
166
f
167
r
168
a
169
s
170
t
171
r
172
u
173
c
174
t
175
u
176
r
177
e
178
179
w
180
i
181
t
182
h
183
o
184
u
185
t
186
187
t
188
o
189
d
190
a
191
y
192
'
193
s
194
195
c
196
o
197
n
198
s
199
t
200
r
201
u
202
c
203
t
204
i
205
o
206
n
207
208
c
209
o
210
s
211
t
212
s
213
.
214
215
P
216
o
217
s
218
t
219
-
220
2
221
0
222
2
223
0
224
225
f
226
a
227
c
228
i
229
l
230
i
231
t
232
i
233
e
234
s
235
236
b
237
u
238
i
239
l
240
t
241
242
f
243
o
244
r
245
246
A
247
I
248
249
w
250
o
251
r
252
k
253
l
254
o
255
a
256
d
257
s
258
259
b
260
u
261
t
262
263
c
264
a
265
r
266
r
267
y
268
269
p
270
r
271
e
272
m
273
i
274
u
275
m
276
277
p
278
r
279
i
280
c
281
i
282
n
283
g
284
.
285
286
R
287
e
288
t
289
r
290
o
291
f
292
i
293
t
294
295
p
296
o
297
t
298
e
299
n
300
t
301
i
302
a
303
l
304
305
v
306
a
307
r
308
i
309
e
310
s
311
312
w
313
i
314
d
315
e
316
l
317
y
318
319
-
320
321
i
322
n
323
c
324
l
325
u
326
d
327
e
328
329
e
330
n
331
g
332
i
333
n
334
e
335
e
336
r
337
i
338
n
339
g
340
341
a
342
s
343
s
344
e
345
s
346
s
347
m
348
e
349
n
350
t
351
s
352
353
i
354
n
355
356
o
357
l
358
d
359
e
360
r
361
362
p
363
r
364
o
365
p
366
e
367
r
368
t
369
i
370
e
371
s
372
.
What Your OM Needs to Address
Power Infrastructure Detail
Include utility interconnection details, transformer capacity, and expansion rights
Data to Include
Current MW capacity, contracted vs available power, utility rate schedules, backup generator specifications and fuel contracts
Cooling System Specifications
HVAC redundancy levels and efficiency ratings directly impact NOI
Data to Include
PUE ratings by season, cooling system type (air vs liquid), N+1 or 2N redundancy, recent utility bills showing cooling costs
Fiber Connectivity Map
Carrier neutrality and fiber diversity drive colocation premiums
Data to Include
On-net carrier list, fiber entrance facility details, dark fiber availability, cross-connect revenue per cabinet
Tenant Concentration Risk
Single-tenant risk is higher in Boston's specialized market
Data to Include
Tenant roster by revenue percentage, lease expiration schedule, credit ratings, expansion/contraction rights in leases
Permitting and Expansion Rights
Future capacity expansion can double asset value in tight market
Data to Include
Current zoning approvals, utility capacity reservations, environmental permits, construction timeline and cost estimates
Operating Expense Breakdown
Power and cooling dominate opex - show efficiency trends
Data to Include
3-year utility cost history, PUE improvement initiatives, maintenance contracts, staff count and costs per MW managed
Investment Outlook
Short Term
Supply shortage continues through 2027. Existing facilities see 10-15% rent growth. New construction costs hit $12-15M per MW. Permitting remains 18-month+ process.
Medium Term
Power grid improvements by 2028-2029 may ease constraints. Edge computing expansion accelerates. Biotech sector consolidation could impact specialized facilities. Climate regulations may require efficiency upgrades.
Long Term
AI workload growth fundamentally changes power requirements. Quantum computing facilities emerge as new asset class. Sea level rise impacts coastal facilities. Grid modernization enables renewable power integration.
Buyer Profile
REITs dominate acquisition activity above $50M. Private equity targets value-add opportunities in 2010-2015 vintage. Hyperscalers increasingly build vs buy. Foreign capital active in sale-leaseback structures.
Marketing a data center property in Boston?
DealDraft generates professional offering memorandums with market-specific data and property-type expertise built in.
Create Your OM