Death and Taxes

It’s April 19,and with tax day fresh in my memory,I’m reminded of the Reid-McConnell Tax Relief Act,which provides for 100 percent bonus depreciation on deduction allowances for investments in new business equipment placed in service between Sept. 8,2010,and Dec. 31,2011.  I’m no tax professional,but I do know this:corporations with data center needs built into their strategic plan for the next few years might want to take a closer look at moving those investments into 2011.  Companies that need to purchase generators,power distribution units(PDUS) ,or even just servers for their data centers could see some significant savings if covered by the provisions of the legislation.

From a real estate perspective,I can tell you that a number of companies are already locking into contracts for space to take advantage of the act.  While there have been several build to suits announced over the last couple of years,these corporations that have placed their equipment into service this year will enjoy these tax savings,there are considerably more companies pursuing wholesale and colocation space to try and take advantage this calendar year.  Based on the demand activity that we are seeing throughout the US,  it may cause companies that were planning on relocating in 2012 to take space in 2011,thereby absorbing supply at a much quicker pace than anticipated.

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