Lee Data Center
Start with the land. Underwrite an advertised industrial parcel, test the development constraints, and connect acquisition cost to a hypothetical 10 MW data-center investment.
Hypothetical development using a publicly listed Midlothian, Virginia parcel. Listing facts are broker-reported; no acquisition, entitlement or electric service is secured. All operating, construction and financing inputs are illustrative portfolio assumptions, not market quotes, lender terms, site feasibility findings or a real development proposal.
The parcel sets the investment case.
16000 Midlothian Turnpike, Midlothian, VA 23113. Commonwealth Commercial advertises approximately 28.693 acres for sale. Its offering flyer quotes $9.8 million. Listing checked October 28, 2026; price and availability have not been reconfirmed directly with the broker.
- Gross land area
- 28.693 acres
- Published asking price
- $9,800,000
- Asking price / acre
- $341,547
- Site basis + allowances
- $11,092,000
What the listing supports
The broker reports I-2 General Industrial zoning, water availability and proximity to Route 60 / SR 288. These are marketing representations. The proposed data-center use, parcel boundaries and utility capacity require independent confirmation.
What enters the model
Whole-parcel acquisition at asking price; 2% closing allowance; $150,000 diligence; $750,000 enabling works; two years of carrying allowance at 1% of purchase price per year. Only the asking price and acreage are sourced. The remaining amounts are explicit underwriting assumptions.
Usable area before design
A 70% developable-area assumption leaves 20.085 acres. A planning allowance of 150,000 square feet of building footprint would occupy about 17.1% of that area. This is a screening calculation, not a survey or site plan; setbacks, stormwater, access, generators, cooling and a substation may change it materially.
Conditions before committing capital
- Title, survey, easements, access and environmental / geotechnical reports.
- Written zoning confirmation for data-center use and any rezoning or permit path.
- Binding electric capacity and delivery terms; 10 MW IT implies 13.5 MW facility demand at design PUE 1.35, before reserves.
- Water / sewer capacity, fiber routes, stormwater, flood and insurance review.
- Tenant evidence, contractor bids and an independently supported exit value.
Recommendation: defer acquisition and construction. An advertised industrial parcel is not proof of a powered or entitled data-center site. The exit enterprise value already includes the developed property; land is not added again at sale.
Edit investment & financing assumptions
Starting inputs are authored teaching assumptions. The listed Virginia parcel is not an entitled or powered data-center site. Site costs are separately timed below. Confirm utility capacity, tariffs, tax treatment, insurance and flood exposure before any real-world use. Edits are temporary; export before leaving.
- Project CapEx
- $145,492,000
- Equity IRR
- 16.2%
- Equity MOIC
- 3.50x
- Minimum DSCR
- 0.50x
Returns are only half the decision.
The illustrative capital structure breaches the 1.30x coverage hurdle in years 2, 3, 4, 5, 6, 7. Sponsor support or a revised repayment profile is necessary even when terminal proceeds produce attractive equity returns.
Development thesis
Acquire the listed parcel and build two independent 5 MW phases. Fund construction through pro-rata debt draws and sponsor equity; lease capacity after each phase becomes available. Test power economics and cash coverage before assigning value to the exit.
Parcel diligence gates
- Utility interconnection capacity, delivery timeline and tariff structure.
- Site-level flood, storm, insurance and resilience assessment.
- Contracted customer demand, tenant credit and power-cost pass-through.
- Local property taxes, permitting and construction contingencies.
The public listing is the land reference; no purchase agreement, power contract, permitted use or tenant commitment is assumed secured.
Capital and return bridge
| Measure | USD |
|---|---|
| Construction debt commitment | $65,471,400 |
| Development + fees + pre-operation interest | $148,982,416 |
| Funding equity for those uses | $83,511,016 |
| Total net equity contributions | $94,709,162 |
| Total net equity distributions | $331,015,288 |
| Operating debt-service shortfall | $11,198,146 |
Funding equity is a sources-and-uses subtotal. Actual contributions include annual net cash deficits; operating receipts can fund later development.
| Case | Equity IRR | MOIC | Minimum DSCR | Breach years |
|---|---|---|---|---|
| Base | 16.2% | 3.50x | 0.50x | 2, 3, 4, 5, 6, 7 |
| Upside | 23.7% | 6.06x | 0.77x | 2, 4, 5 |
| Downside | 2.1% | 1.16x | 0.13x | 2, 3, 4, 5, 6, 7, 8, 9, 10 |
Upside: rent +10%, power −10%, CapEx −5%, lease ramp ×1.1 (capped at 100%), exit +2x, rate −1 percentage point. Downside: rent −10%, power +20%, CapEx +10%, lease ramp ×0.8, exit −2x, rate +2 percentage points. Timing stays unchanged; use phase inputs to test delays.
Model evidence & exports
Download the current assumptions and scenario results. The Power BI project includes a fixed starter snapshot; these exports reflect your edits.
10 MW site underwriting
Acquire the whole listed parcel, then develop two 5 MW phases. The model separates $134.4 million of non-land development from $11.092 million of acquisition, diligence, closing, carrying and enabling costs. No existing campus cash flows or shared-asset savings are credited.
- Development CapEx
- $145,492,000
- Equity IRR
- 16.2%
- Equity NPV at 15%
- $6,846,060
- Minimum DSCR
- 0.50x
Recommendation: do not approve under current terms
The base case breaches the assumed 1.30x debt covenant in six operating years. The workbook traces debt draws, interest, principal, CFADS, equity returns and exit proceeds, with native Excel sensitivities, a debt-capacity screen and reconciliation checks. The memo sets out the downside and conditions for resubmission.
The workbook and interactive model use the same 10 MW site-case defaults. Browser edits do not sync to the workbook. The earlier 20 MW Power BI starter requires a dataset replacement. The asking price is sourced; development, financing and feasibility assumptions remain hypothetical.
Public benchmark sources and model use
- Turner & Townsend Data Centre Construction Cost Index 2026
US average construction cost: $12.08/W. $13.44 million/MW is the assumed non-land development budget. Site acquisition and enabling costs are added separately. It is not a Midlothian bid or an AI-specific facility quote.
- Turner & Townsend 2026 methodology
Typical benchmark facility is about 60 MW IT load. Land, utility works, site works, active IT equipment and professional fees are excluded. The 10 MW case is smaller and includes land, utility interconnection, engineering and contingency. Customer servers and GPUs are excluded. Benchmark and project scope are not equivalent.
- CBRE North American Data Center Trends 2025 release, February 26, 2026
National average lease rate: $194.95/kW/month. Primary-market vacancy: 1.4%. $225/kW/month is an uncontracted analyst assumption, not a Midlothian comparable. Tenant size, power charges, service level and lease terms differ. No separate power reimbursement is credited.
- Site utility diligence — analyst assumption
Broker listing states water available; it provides no binding electric capacity, tariff, fiber or energization commitment. $0.075/kWh is an unverified allowance, not a Virginia tariff. No Texas electricity benchmark is used for this parcel.
- Uptime Institute Global Data Center Survey 2025, page 7
Survey weighted-average annual PUE: 1.54. PUE 1.35 is an unverified design target, better than the survey average. It requires engineering support and should be stressed before investment.
- PowerStack The Data Center Power Reckoning Has Begun
User-supplied industry commentary on power access and delivery risk. Used to frame diligence questions only. No queue duration, microgrid saving or vendor performance claim is embedded in the model.
- Commonwealth Commercial active parcel listing
16000 Midlothian Turnpike, Midlothian, VA 23113. 28.693 acres; advertised I-2 industrial zoning and water available. Page displays For Sale. Listing checked October 28, 2026. Marketing statements are not independent zoning or utility verification. No broker contact or site control is represented.
- Broker offering flyer — published asking price
$9,800,000 asking price for 28.693 acres. Asking price is the acquisition input, not an appraisal or agreed purchase price. Reconfirm availability and price before relying on the case.
Sources accessed October 28, 2026. No confidential employer, customer or facility information is used.
The companion equity research case
WD-40 Company · NASDAQ: WDFC. Selected SDSU CFA Institute Research Challenge team member, leading company overview and business mapping, management strategy, governance, ESG and business-risk research.
Explore WD-40 research →Research in progress. Selection and role are owner-provided; a target price or completed valuation is not implied.
Educational and informational purposes only. No personalized financial advice. No actual lender commitment, operating asset, secured power capacity or investment opportunity is represented.