TULSA, OK—Tulsa is among the least expensive markets for developing and operating a 5-megawatt (MW) enterprise data center over a 10-year period, according to a recent study from CBRE Group, Inc. Tulsa' potential is a result of its increased tax incentives for enterprise data centers and its low power, facility construction, and land costs CBRE's report says.

The study modeled the cost of constructing, commissioning, and operating a 5 MW data center for 10 years across 30 U.S. markets, and categorized markets into three cost bands (low, moderate and high) according to analysis of specific cost components including tax incentives, power, construction, land and labor.

"Tulsa has seen success in the data center market because companies recognize the favorable financial, business and government climate we offer," said Dwayne Flynn, a vice president with CBRE in Tulsa. "Combine that with sound economic benefits like low cost of power, available land at competitive prices and a skilled workforce, and we are a very attractive market."

· Tax Incentives: Data centers are capital intensive and generate significant sales and property tax revenues for state and local jurisdictions. Increasingly, markets that seek to attract data centers are offering significant tax incentives to help reduce the total cost of operations for data centers. The CBRE report found that Tulsa's net tax burden accounted for 7.0% of the total project cost, below the 8.7% average total project cost across the 30 markets.

· Power: The least expensive power rates were in Tulsa, Quincy, and Des Moines. At 10.2%, Tulsa had the fifth-lowest power costs as a share of the total project cost among the 30 markets in the study. Power costs average 13.2% of the total project cost over the life of the project, but vary from 6.5 percent in Quincy, Washington, to 21.3% in Boston.

· Construction Costs: Tulsa – along with Charlotte, San Antonio, Jacksonville and Dallas– was among the least expensive markets in which to build a Tier III facility, although at 40.1%, its facility construction costs as a share of the total project cost were above the 35 percent average share across the 30 markets in the study.

· Land Costs: Tulsa's land acquisition costs as a share of the total project cost were just behind Buffalo as the third-lowest of the 30 markets in the study, and at .4%, significantly below the 2.5% average share of the total project cost across the 30 markets.

· Labor: With a need for critical environment engineers that provide round-the-clock coverage, labor costs average $13.2 million over a 10 year-period and account for an average of 4.9% of the total project cost. Market-rate labor costs were above average in Tulsa, at 5.6%, as they were for Quincy, Des Moines and other overall low-cost markets. Labor costs in Tulsa came in at 5.6% of the total project cost, making Tulsa the second-highest share of the total project cost among the 30 markets, behind Cheyenne and Quincy.

"The ever-increasing need for data exchange, storage and security is broadening demand for data centers in the U.S., but one solution does not fit all," said Pat Lynch, managing director, Data Center Solutions, CBRE. "Capital and operating costs vary considerably by market, and non-monetary factors such as proximity to a headquarters location, fiber density and environmental and other risk factors can also drive enterprise site selection decisions."

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