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Dallas Data Centers: 'Something Special'

Stream Data Centers Chief Operating Officer Michael Lahoud, Compass Datacenters Senior Vice President Chris Curtis, JLL Senior Vice President, Data Center Solutions Ali Greenwood, who moderated, Evocative Data Centers founder and CEO Arman Khalili, RagingWire Data Centers Vice President James Leach and DataBank Ltd. CEO Raul Martynek at Bisnow's DICE South 2018 event.

Dallas-Fort Worth is a strong data center market, and getting stronger.

RagingWire Data Centers Vice President James Leach, whose company has 1.5M SF and 113 megawatts in the United States and a global data center platform of 140 locations in 20 countries, called DFW the No. 3 data center market in the country, after Ashburn, Virginia, and Silicon Valley.

"We're part of something special in the Dallas-Fort Worth Metroplex," Leach said at Bisnow's Data Center Investment Conference & Expo South event this week in Dallas' Infomart. "This market is either going to separate itself from the rest of the pack, and solidify itself as one of the top three markets in the country, or it might not. We're in the middle of a supply boom in the area. Will that supply create demand? Will the hyperscalers take off in this market?"

DataBank Ltd. CEO Raul Martynek said DFW is a destination market. Workloads from outside the local area seek it out. Salt Lake City and perhaps Atlanta are also destination markets his company is involved in, Martynek said. DataBank just completed its third data center in the metroplex, in Plano, and Martynek said he is optimistic that demand will meet the supply coming online in the market.

"Dallas and Chicago compete," Martynek said. "Recently, a customer showed us their rationale for picking Dallas. In their case, they were looking for latency to the central U.S. population, and found that from Dallas they could hit more population with lower latency than from Chicago."

Evocative Data Centers founder and CEO Arman Khalili, whose company is a 15-month-old startup, said Evocative now has seven facilities in five markets. "We acquired a company that had a facility in Plano, and we're looking to acquire further in the Dallas-Fort Worth market," he said.

"We think that the hyperscale market is going to be quite competitive," Khalili said. "There is going to be major price compression, and we love the 2 MW to 5 MW space. You can call it edge, though we just call it retail. That's the model we're going after, and we like the Dallas market."

Stream Data Centers Chief Operating Officer Michael Lahoud said that one of the challenges facing the industry is how to attract hyperscale, but also maintain the resiliency levels that traditional enterprise customers look for in a wholesale data provider. "We try to get the price point right for both parties, while keeping resiliency where it needs to be," he said. 

Compass Datacenters Senior Vice President, Acquisition and Development Chris Curtis said hyperscale isn't just happening in Dallas, but the entire data center business. "You have to anticipate where your handful of customers want to be," he said. "We're seeing signs that they want to be in Dallas.

"The enterprise market is not dead," Curtis said. "We just did an enterprise deal in the Metroplex. Dallas has always been a destination market, and that isn't going to change. There is a lot of supply now, and the question is not whether it will be absorbed, but whether it will be absorbed fast enough."