As AI drives demand for data centers, developers face major challenges: how to bring new supply to market while navigating regulatory, financing and infrastructure hurdles that can throw projects off course.
That’s where Greenberg Traurig’s 110+-attorney Digital Infrastructure Industry Group comes in. The multidisciplinary team guides clients through the full lifecycle of data center developments and transactions, helping projects stay on course from site selection through construction and operation. We sat down with core team members to explore how their market knowledge and experience help developers navigate both the challenges and opportunities fueled by the skyrocketing demand for data centers.
The AI revolution hits real space
While data centers are nothing new, the arrival of AI on the scene has created an explosion in compute power demand that’s sent developers scrambling to build more, and bigger, data centers.
As facilities grow larger and increasingly expensive, vertical construction requires developers to commit significant capital upfront to secure power capacity and long-lead equipment. At the same time, developers must move quickly to lock in sites, financing and entitlements, all while facing growing community and regulatory scrutiny.
“Even with demand at record levels, delivering a data center project isn’t getting any easier,” says Joshua B. Forman, a Corporate Practice Shareholder at Greenberg Traurig and Co-Chair of the firm’s Digital Infrastructure Industry Group. “Access to land, power, fiber, water and other local infrastructure can make or break a project. And because a single town hall meeting can derail a project, developers need to understand whether they have meaningful support at both the state and local level before they can proceed.”
That scrutiny extends to financing, where lenders are increasingly selective.
“Tighter spreads and uneven comfort with this asset class have made lenders more cautious,” said Marc Lazar, a Real Estate Practice Shareholder and Co‑Chair of Greenberg Traurig’s Digital Infrastructure Industry Group. “Knowing which lenders are active in this space, including how considerations such as power availability, phased build‑outs, and pre‑leasing requirements factor into underwriting, is essential for data center projects.”
Building at scale
As projects scale up, so do the stakes.
“When you’re building massive, highly technical facilities on extremely compressed schedules, there’s very little margin for error,” says John S. Ducat, a Shareholder in Greenberg Traurig’s Construction Law Practice. “Data centers bring added layers of complexity, from specialized power and cooling systems to phased construction and coordination with operators and tenants. It’s critical to have a clear plan in place before negotiating construction contracts and operating agreements.”
The size and scope of these projects also place them under heightened environmental scrutiny, with issues ranging from wastewater treatment and water usage to backup power and emissions.
“Developers need to factor environmental permitting and compliance into their timelines from the outset,” says Courtney M. Shephard, a Shareholder in Greenberg Traurig’s Environmental Practice, “because the environmental issues directly affect project approvals, costs and financing.”
Knowledge is power
Greenberg Traurig’s Digital Infrastructure Industry Group wasn’t created to chase the AI trend.
The global group includes more than 110 lawyers across a range of disciplines, from real estate to energy & natural resources and mergers & acquisitions, all with experience advising on the legal and regulatory issues shaping data center development today.
“We recognized early on that digital infrastructure would require a truly integrated approach,” says Michael J. Baum, Co-President of Greenberg Traurig and Co-Chair of the firm’s Global Real Estate Practice. “We’ve spent years intentionally building a multidisciplinary platform that enables our teams to deliver the local execution and global scale these high-stakes projects demand. This is a core strategic focus for our firm.”
The group’s client roster includes many of the biggest players in the data center space, highlighted by its recent representation of PIMCO on the $27 billion private-debt financing for Meta’s Hyperion data center campus in Louisiana. Greenberg Traurig ranks among the top four U.S. law firms powering the data center sector, according to independent analytics firm Pirical.
“We understand how data center deals are put together from all sides — what developers and landlords need, and what lenders and tenants are looking for when assessing risk,” says Forman, who previously served as general counsel of a data center company.
That familiarity becomes critical as hyperscale and neocloud demand pushes developers beyond traditional commercial real estate models, forcing them to meet exacting operational requirements while managing long‑term financial and execution risk.
“We’ve seen firsthand which provisions matter most when disagreements arise,” Ducat says. “This helps us focus negotiations on the terms that have real consequences, rather than spending time on issues that don’t ultimately move the needle.”
Putting together the A team
The group also advises developers on how to address community concerns as data center development accelerates nationwide.
While local opposition to large-scale projects is hardly new, data centers are increasingly drawing heightened public attention, making proactive engagement and clear communication key to the development process.
“Developers want to be a part of the community,” says Forman. “There are benefits these projects can bring, from new jobs during and after construction to long-term contributions to the local tax base, and that’s the message that needs to be communicated.”
The team helps clients tackle both power availability and transmission, which often requires building out extensive infrastructure. Utilities and grid operators increasingly are shifting costs to developers, requiring them to fund or build their own added capacity, and, in some cases, post collateral or letters of credit. The measures are designed to protect electricity providers and ratepayers if a project fails to lease up or shuts down before upgrades are fully utilized.
“Data center projects demand a coordinated approach to power issues,” says Shephard. “Combining transactional and regulatory guidance allows us to help clients navigate permitting for additional infrastructure and behind-the-meter projects and obtain the necessary regulatory approvals to move projects forward.”
Support beyond the ribbon cutting
As data centers transition from build-out to long-term operation, clients rely on Greenberg Traurig for guidance on leasing and commercial agreements across a broad range of end users.
“We’ve worked with virtually every type of data center customer,” Lazar says. “That experience allows us to guide clients through leasing decisions and support the deal from start to finish.”
After all, getting a data center up and running is only the beginning.
“What really shines is our ability to continue to service and support that client as they continue to operate,” says Forman. “There aren’t many firms that have the bench and capabilities we do. Our lawyers have hands-on experience inside data centers, from working with fiber to installing servers, which gives us a practical understanding of how these projects operate. This is what we do every day.”
To learn how Greenberg Traurig’s Digital Infrastructure Industry Group can help you with your next data center project, visit their website.