Tenants Still Commanding Data Centers
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JLL Southeast data center chief Mike Dolan (right with JLL's Ryan Fetz) tells us demand isn't slacking off, as both cloud and further outsourcing feed the data center industry monster. “A lot of the enterprise users are realizing that going with low-scale colo is a better play,” he says. Plus, there's growing pressure among Fortune 500 CFOs to reduce capex--and outsourcing data center operations does that. Tenants should see favorable leasing rates through 2015, Mike says, due in part to third-party providers being aggressive on new development that has outstripped demand over the past three years.
Of course, if you're in need of data center space in Houston, don't expect a great deal. Only three North American markets were labeled "provider-favorable" by JLL, and Houston is one of them. (It also topped the firm's list of emerging data center markets.) Research manager Graham Hildebrand (right, with fellow JLL researchers Margaret Martin, Lance Collett, and Chris Burns) says the pendulum will swing toward Houston data center users in Q1 of next year. (Ironically, the rest of the country has cut down on its pipeline and is predicted to become provider-favorable late next year.)