Ask HN: Negotiating sale of property to a datacenter company

1 pointsrhmw2b9mo ago3 comments

Hi HN,

A close friend is looking at selling their family farm in Colorado and he received a letter of intent from a company that builds datacenters. He suspects that water rights as well as the location play a significant role in their interest in the property, and he thinks that their offer is low all things considered. Who would he consult with to find out what the property is worth and how to best negotiate the purchase?

Thanks!

3 comments

bell-cot9mo ago

What was his family farm worth, the day before he got the DC letter - as a farm, or potential suburb, or for oil wells, or whatever?

(IIR, the assessed value of farms in Colorado, for purposes of property taxes, bears no resemblance to their market value. That's a "tax scam" for the benefit of the farmer.)

Is there anything really special about his family farm, that would discourage the DC folks from buying up some other farm - say, 5 or 10 miles away - if he didn't take their offer?

How popular is a DC likely to be in the area, and how much does your friend value his reputation and relationships there?

toomuchtodo9mo ago

They should reach out to a data center realty broker who is willing to represent them on the sell side. There will be a fee of course, but it should theoretically be recovered through maximizing the value obtained closing the transaction.

Talk to at least three brokers, interview them and ask for references. They shouldn’t need to be local.

uberman9mo ago

This guide seems helpful:

    https://www.mastt.com/guide/data-center-construction

TLDR:

    1/4 million an acer.

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