Data centres lease power, not floor area, so a per-square-foot rent only means something once you know the density behind it.
To convert data centre rent from per kW to per square foot, multiply the monthly rent per kW by the kW per square foot of white space and by 12. At an illustrative $105 per kW-month and a density of 200 W per square foot, that is $252 per square foot of white space a year. The same rent at 100 W is $126 and at 600 W is $756, so a per-square-foot figure quoted without its density says almost nothing about price.
Worked in full in The Data Center Development Handbook by Julian R. Sterling, with every figure reproduced in a free workbook.See the book on Amazon →
The case is a single wholesale hall leased to one tenant on a capacity basis. Rent is charged on contracted critical IT load; energy is metered and recharged separately. All figures are illustrative.
| Input | Value |
|---|---|
| Contracted critical IT load | 6,000 kW |
| Rent, per kW per month | $105 |
| White space (the data hall floor) | 30,000 sq ft |
| Gross building area per sq ft of white space | 2.0 |
| Annual rent | $7,560,000 |
Density = 6,000 kW x 1,000 / 30,000 sq ft = 200 W per sq ft, or 0.20 kW per sq ft
Rent per sq ft of white space a year = $105 x 0.20 x 12 = $252
Check: $7,560,000 / 30,000 sq ft = $252
Rent per sq ft of gross area = $252 / 2.0 = $126 on 60,000 sq ft
Reverse: rent per kW-month = rent per sq ft a year / kW per sq ft / 12
In Excel, with rent per kW-month in B2 and watts per square foot in B3: =B2*B3/1000*12, and back the other way =B4/(B3/1000)/12.
Two denominators hide in the phrase "per square foot". White space is the raised floor or slab where the racks stand; gross area adds the electrical rooms, plant, loading and offices, as large again in this illustrative building, and the ratio varies widely between designs. Halving the per-square-foot rent by moving from white to gross area changes nothing about the deal, which is the first sign that floor area is the wrong unit.
Hold the rent at $105 per kW-month and change only how much power each square foot carries. The per-square-foot rent moves in proportion. Read the last column the other way: a landlord asking a flat $252 per square foot is charging very different prices for power depending on the density the tenant can actually use.
| Density, W per sq ft | $ per sq ft a year at $105 per kW-month | $ per kW-month at $252 per sq ft |
|---|---|---|
| 100 | 126 | 210.00 |
| 150 | 189 | 140.00 |
| 200 | 252 | 105.00 |
| 300 | 378 | 70.00 |
| 600 | 756 | 35.00 |
This is why high-density halls for AI training look expensive on a square-foot basis while being priced in line per kW. A 600 W hall at $756 per square foot charges exactly the same for power as a 200 W hall at $252.
A tenant needing 6,000 kW receives two proposals. Offer A is quoted at $180 per square foot of white space in an older building designed for 120 W per square foot. Offer B is $252 per square foot in a newer hall at 200 W. On the face of it A is 28.6 per cent cheaper.
| Offer | $ per sq ft | W per sq ft | Space needed, sq ft | $ per kW-month | Annual rent, $m |
|---|---|---|---|---|---|
| A, older hall | 180 | 120 | 50,000 | 125.00 | 9.00 |
| B, newer hall | 252 | 200 | 30,000 | 105.00 | 7.56 |
| A minus B | 20.00 | 1.44 |
Converted to the unit the tenant actually consumes, A is 19.0 per cent dearer: $125.00 per kW-month against $105.00, or $1.44 million a year more for the same 6.0 MW. The lower floor rent is more than offset by the extra 20,000 square feet needed to house the same load.
Always convert to rent per kW of contracted critical load before comparing, and confirm the density is the design density the hall can cool, not a nameplate figure. A floor that cannot cool 200 W does not deliver 200 W, whatever the lease says.
The usual error, especially among investors coming from offices or logistics, is to benchmark a data centre's passing rent per square foot against other property types or against older data centre transactions. A rent of $252 per square foot looks extraordinary next to office rents, yet it is an ordinary capacity rent at 200 W. Comparing per-square-foot rents across buildings of different density mixes up price and specification.
The second error is forgetting that rent is paid on contracted capacity, not on what the tenant uses. A tenant drawing 70 per cent of its contracted 6,000 kW pays $105 per kW-month on paper but $150.00 per kW it actually uses. That is the economics behind ramp schedules and minimum take clauses, and it is why the escalator and the ramp often matter more than the headline rate, as the article on matching a 2 against a 3 per cent escalator shows.
Rent per square foot a year equals rent per kW-month times kW per square foot times 12: $252 at 200 W for a $105 rent. Use it to translate, never to compare. The decision unit is the kilowatt, and the book's underwrite on a 180 MW campus, with its $105 per kW-month turnkey rent, is laid out line by line in the free workbook for this case.
Because the scarce resource is power and cooling capacity, not floor area. The tenant's cost of computing scales with kilowatts, and the developer's cost is mostly electrical and mechanical plant. At $105 per kW-month a 6.0 MW hall rents for $7.56 million a year whether it occupies 30,000 square feet or 50,000.
Divide the annual rent per square foot by the kW per square foot, then by 12. An offer at $180 per square foot of white space at 120 W per square foot is 180 / 0.12 / 12 = $125.00 per kW-month. The same $252 per square foot is $210.00 per kW-month at 100 W but $35.00 at 600 W.
Usually not in a wholesale lease: the rent pays for capacity and the energy actually consumed is metered and passed through, often marked up by the PUE. If the tenant uses only 70 per cent of its contracted capacity, the $105 rent costs it $150.00 per kW-month actually used, which is why tenants negotiate ramps.
This article is one calculation from The Data Center Development Handbook. The book takes the same case from first principles to the decision, chapter by chapter, and every figure it prints is a live formula in the free companion workbooks.
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