Data Centers in Cedar Rapids
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Cedar Rapids – Low-Risk, Cost-Effective Colocation
Executive Summary
Cedar Rapids is an excellent market for enterprises seeking a cost-effective and low-risk location for disaster recovery or secondary production workloads. The region's combination of affordable power, significant tax incentives, and a low natural disaster profile makes it a strong contender for companies that do not require single-digit millisecond latency to major coastal hubs. This market delivers stable, high-value infrastructure for businesses focused on operational resilience and budget predictability.
Cedar Rapids: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid regional connectivity, well-suited for enterprise and DR applications. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Cloud access is available via private network extensions to hubs like Chicago. |
| Power Cost | $0.07 – $0.09/kWh | High renewable mix (~60% wind) helps stabilize pricing and support sustainability goals. |
| Disaster Risk | Moderate (43.14 Score) | Very low risk profile compared to national averages; primary risks are weather-related. |
| Tax Incentives | Yes | Sales and use tax exemptions are available for qualifying data center investments. |
| Sales Tax | 6.00% (State) | Iowa sales tax as of Midyear 2025. |
Network & Connectivity Ecosystem
Cedar Rapids provides reliable connectivity for enterprise needs, though it is not a primary interconnection hub. The ecosystem is built for stability and regional access rather than high-density, low-latency trading.
Carrier Density & Carrier Neutrality The market is served by at least 3 providers, including national and regional carriers, as of September 2025. Carrier-neutral facilities offer access to the connectivity required for production and disaster recovery workloads.
Direct Cloud On-Ramps There are no direct public cloud on-ramps within Cedar Rapids as of September 2025. Secure, private connections to all major cloud providers, including AWS, Google Cloud, and Microsoft Azure, are established via dedicated network circuits to the nearest major hub in Chicago.
Internet Exchange Points (IXPs) Public peering is limited within the immediate market. Most network peering is conducted privately between carriers or routed through major regional exchanges in cities like Des Moines or Chicago to ensure efficient traffic exchange.
Bare Metal Bare metal server solutions are available in the region, typically through national providers with a presence in the Midwest. Companies like ColoCrossing can service deployments in secondary markets like Cedar Rapids.
Power Analysis
Average Cost Of Power Industrial power costs in the Cedar Rapids area are competitive, estimated between $0.07 and $0.09/kWh as of September 2025. This favorable pricing is partly due to a grid powered by approximately 60% renewables, primarily wind, which helps reduce cost volatility for long-term operations.
Power Grid Reliability The power grid serving the region is well-engineered and reliable, designed to support significant industrial loads. Data centers in the area benefit from stable infrastructure common in established Midwestern utility territories.
Market Access, Business & Tax Climate
Proximity To Key Business Districts Data centers in Cedar Rapids are positioned to support the area's key industries, including advanced manufacturing, agricultural technology, and food processing. This proximity provides low-latency compute infrastructure for local enterprise operations.
Regional Market Reach From Cedar Rapids, businesses can effectively serve end-users across Iowa and adjacent states like Illinois, Minnesota, and Nebraska. It is a strategic location for delivering services to the Upper Midwest with better performance than facilities on the coasts.
Tax Advantage For Data Centers Iowa offers a significant financial advantage through a sales and use tax exemption on data center construction materials, equipment, and power. This state-level incentive dramatically lowers the total cost of ownership for large-scale deployments, making it a highly attractive financial environment for new builds.
Natural Disaster Risk
Cedar Rapids has a moderate natural disaster risk profile, with a FEMA National Risk Index score of 43.14 out of 100 as of September 2025. This score is significantly lower than many other US metro areas, making it a compelling location for risk-averse operations.
The primary environmental risks to consider are weather-related events, including:
- Tornado
- Strong Wind
- Riverine Flooding
- Winter Weather & Ice Storms
- Hail
- Drought
