Google (NASDAQ: GOOGL) has been making big moves in the real estate market. Earlier this summer, the company announced its plans to develop a multibillion-dollar transit village and campus in San Jose, CA, a long-time established hub for Google. But San Jose isn't the only one benefiting from Google's efforts for expansion. Columbus, Ohio, is getting a big boost after Google stated it will be investing an additional $1 billion toward data centers in central Ohio. Does this mean opportunities could be coming for investors? Here's what you need to know.
Putting central Ohio on the map
Google has openly stated its plans to expand and grow its office and data-center footprint, allocating $7 billion for these initiatives in 2021. And central Ohio seems to be the ideal place to do it. The company already has a $600 million data center in New Albany, Ohio, that began development in 2019. The new land acquisition added 618 acres in Columbus and Lancaster, Ohio, for future developments of data centers, bringing the total footprint to 1,000 acres in this region. Google has indicated that it plans to add a Google Cloud Platform (GCP) infrastructure here, which allows users to improve the speed and recognition for data storage by choosing cloud location, making it one of eight data centers in the U.S. to offer this and only 27 others globally.
Google developments don't change a market overnight, but over a decade its developments can make a tremendous impact on the local communities. Columbus is starting to establish itself as a major emerging tech hub. The city ranks number 10 for net absorption of industrial real estate including data centers and is also number 10 for highest concentration of millennials according to a recent CBRE report, making greater central Ohio region the perfect blend of affordable and available land for development, centralized location for improved data services, established energy infrastructure, and well-trained workforce.
New Albany and Lancaster are smaller suburbs on the outskirts of the city of Columbus, meaning this and future developments could make a big impact on the community. The city of Columbus has been working closely with Google, helping create a million-dollar tax incentive to drive Google's and other big tech dollars to the area, a method that is clearly paying off. New Albany, Dublin, and Hilliard are all home to Amazon data centers in Ohio, in addition to data centers for Facebook and Cologix located in New Albany. If Google were to develop in Lancaster as intended, it would be the largest commercial development the area has seen, one the area hopes will set the stage for other developers to follow suit.
A clear signal for investors
Google's business model is heavily reliant on sufficient data storage, an industry that has done superbly well, even during the global pandemic, and will likely continue to prosper as demand for data accelerates in our technological era. This new land acquisition is only backing the clear, long-term demand for cloud computing and cloud storage and should be a major signal to investors where opportunity lies.
Data storage needs aren't going anywhere, and making Columbus a GCP will pave the way for further data-sector developments in this area in the future. New developments like this help support high-quality jobs and drive money to the area. This oftentimes directly results in higher real estate values and increased demand for residential housing and rental properties, which is great news for real estate investors.