Microsoft buys 616 Iowa acres for $95.5 million data center site

Microsoft bought 616 acres of farmland in Dallas County, Iowa, for $95.5 million and plans to develop it into a data center campus, Data Center Dynamics reported, citing Business Record.

The seller was TC Austin Acquisitions LLC, the acquisition vehicle of Trammell Crow, a CBRE subsidiary. It had bought the parcels for just over $30.7 million on the same day. That works out to roughly $50,000 an acre, against about $155,000 an acre in the Microsoft purchase, though the price may cover development services as well as land, according to Business Record.

For advisors and allocators with exposure to data center real estate, the transaction provides a comp: $95.5 million for 616 acres, about $155,000 an acre, though the price may include development services.

Microsoft has not decided the campus design or building count, and construction is years away. The company told residents at a community meeting that design will take two to three years and a further two years before the first building is finished, according to the report. The land lies between Highway 141 and Seminole Avenue near Woodward, about 30 miles northwest of Des Moines.

Microsoft also extended the useful life of its data centers to 25 years, as Private Wealth Daily previously reported, which lowers annual depreciation and lifts near-term reported earnings on assets of this kind.