Data Centers in Albert Lea
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Albert Lea, Minnesota – Cost-Effective Midwest Colocation
Executive Summary
Albert Lea, Minnesota, is a strategic choice for organizations requiring cost-effective colocation with significant tax advantages. This market is well-suited for businesses focused on serving the Upper Midwest with applications that are not hyper-sensitive to latency, capitalizing on low power rates and substantial state tax incentives to reduce operational expenditures. The area's very low natural disaster risk profile provides a stable platform for business continuity and data protection.
Albert Lea, Minnesota: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid connectivity for a smaller market, suitable for many business applications. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Direct access is via nearby hubs like Minneapolis through private network extensions. |
| Power Cost | $0.08/kWh – as of 2021 | Competitive industrial power rates contribute to lower total operational costs. |
| Disaster Risk | Low (24.66) – as of September 2025 | Very low exposure to major natural disasters, enhancing infrastructure resilience. |
| Tax Incentives | Yes | State sales tax exemptions are available for qualifying data center equipment. |
| Sales Tax | 6.875% – as of mid-2025 | Standard state sales tax, but specific data center exemptions offer significant savings. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: Albert Lea supports a focused connectivity environment with at least one carrier-neutral facility available as of September 2025. While not a dense hub, the market provides sufficient options for redundant network services for most enterprise needs.
Direct Cloud On-Ramps: There are no direct cloud on-ramps within Albert Lea as of September 2025. Businesses connect to major cloud providers like AWS, Google Cloud, and Microsoft Azure via the primary regional hub in Minneapolis, accessible through private network interconnects or wavelength services.
Internet Exchange Points (IXPs): Public peering is not a feature of this market. Interconnection is typically established through private peering arrangements within the local data center or by connecting to IXPs in major hubs like Minneapolis to optimize traffic routing.
Bare Metal: Bare metal server options are available, typically provisioned through providers with a national footprint that can deploy resources to edge locations. Services from companies like ColoCrossing can serve deployments in this region.
Power Analysis
Average Cost Of Power: The industrial electricity rate in the region is approximately $0.08/kWh as of 2021. This competitive pricing makes Albert Lea an attractive location for managing the significant power expenses associated with data center operations.
Power Grid Reliability: The power grid supporting Southern Minnesota is well-engineered for reliability. Data centers in the area benefit from stable infrastructure designed to serve industrial and agricultural customers with high uptime requirements.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in Albert Lea are positioned to support local and regional enterprises, particularly in the agriculture, manufacturing, and logistics sectors. Its location provides a low-latency link to businesses operating between Minneapolis–Saint Paul and Des Moines.
Regional Market Reach: Albert Lea effectively serves as a secondary or disaster recovery market for the Twin Cities metro area. It provides reliable colocation for reaching end-users across Minnesota, Iowa, Wisconsin, and the Dakotas.
Tax Advantage For Data Centers: Minnesota offers a compelling sales tax exemption on data center equipment, software, and electricity for qualifying facilities. This incentive directly lowers the capital and operational costs of deploying and maintaining critical IT infrastructure.
Natural Disaster Risk
Albert Lea has a very low natural disaster risk profile, with a FEMA National Risk Index score of 24.66 out of 100 as of September 2025. This rating indicates a highly stable environment for critical infrastructure. The primary environmental risks to consider are severe winter weather, tornadoes, strong winds, and drought. Other risks such as hail, heatwaves, and wildfire are present but less frequent.
