1031 Exchange for Data Center Properties

Data Center 1031 Exchange

Institutional-Grade Security for Data Center 1031 Exchanges

Data center real estate represents one of the most capital-intensive and infrastructure-driven asset classes in today’s market. With long-term leases, specialized buildouts, and significant appreciation potential, selling a data center without proper tax planning can trigger substantial capital gains exposure. A 1031 exchange allows data center owners to defer capital gains taxes while preserving equity for reinvestment into other qualifying real estate assets. HUB 1031 Inc. safeguards every exchange with regulated escrow custody, segregated accounts, and institutional-level oversight to protect investor capital throughout the transaction.

Tailored Support for Data Center Assets

Data center exchanges involve unique considerations such as power infrastructure, cooling systems, redundancy requirements, and long-term tenant commitments. HUB 1031 supports exchanges involving:

  • Single-tenant and multi-tenant data centers

  • Colocation facilities

  • Enterprise and hyperscale data center properties

  • Mission-critical infrastructure real estate

Our role is to ensure exchange proceeds are handled securely and that each step of the exchange process aligns precisely with IRS requirements—without introducing unnecessary financial risk during complex, high-value transactions.

Why Data Center Investors Choose HUB 1031

Data center transactions often involve exceptionally large valuations and extended due diligence periods. Secure custody of exchange funds is essential.

  • Exchange proceeds are held in segregated custodial accounts through Guaranty Escrow, Inc.

  • Custody is subject to DFPI oversight and annual independent audits

  • All personnel undergo DOJ background checks and fingerprinting

  • Funds are never pooled, reinvested, or commingled

  • Security standards exceed what is typical in the unregulated 1031 exchange industry

This institutional approach aligns with the expectations of investors operating in mission-critical real estate sectors.

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Preserve Data Center Equity Through Tax Deferral

Data centers often experience accelerated appreciation driven by demand for cloud services, artificial intelligence, and digital infrastructure. A properly structured 1031 exchange allows owners to defer capital gains taxes and retain full equity for reinvestment into replacement properties or diversified income-producing real estate.

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Reposition Into Other Infrastructure or Income Assets

A 1031 exchange gives data center investors flexibility to reposition capital into qualifying real estate assets such as:

  • Newer or more efficient data center facilities

  • Industrial or logistics real estate

  • Long-term net-leased commercial properties

  • Other institutionally managed real estate investments

This flexibility supports portfolio evolution without sacrificing tax efficiency.

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Improve Operational and Capital Efficiency

Data center owners often use 1031 exchanges to transition away from assets requiring ongoing capital expenditure into properties with:

  • Longer lease durations

  • Lower operational intensity

  • More predictable income profiles

This strategy can improve capital efficiency while maintaining long-term performance.

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Simplify Complex Infrastructure Portfolios

As portfolios grow across multiple facilities or regions, ownership and management structures can become increasingly complex. A 1031 exchange provides a structured path to consolidate equity into fewer, strategically aligned assets—while remaining fully compliant with IRS exchange rules.

Start Your Data Center 1031 Exchange With Confidence

Data center exchanges demand precision, advanced planning, and absolute confidence in fund handling. HUB 1031 Inc. delivers all three. With licensed escrow custody, segregated accounts, and transparent oversight, we help investors navigate high-value infrastructure exchanges with clarity and security.

Contact HUB 1031 Inc. at (424) 340-6254 to discuss your data center 1031 exchange and ensure your investment capital remains fully protected.

1031 Exchange Data Centers

Free Consultation

HUB 1031 Inc. Premium Exchange Services

2100 Pacific Coast Highway
Hermosa Beach, CA 90254

Phone: (424) 322-9317

8:30 am to 5:30 pm Monday through Friday.
We are also available for weekend appointments.

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