Data Center Boom: How 10 Top Data Center Markets Are Faring
North America's data center markets are in high demand—thanks in large part to the continued use of cloud-based technology. Americans use more data than we realize, especially with the rise of streaming services like Netflix and Hulu that require ample storage. (And, of course, all those apps, social media and the unimaginable number of photos and homemade videos saved in the cloud.)
The landscape for data centers is fast-changing, and these 10 markets are benefiting from the booming industry, according to JLL's 2016 Data Center Outlook report.
Inventory: 1.65M SF/194 MW (megawatts)
Net Absorption: 4 MW
Supply in Atlanta has been stable, but JLL projects that will change going into 2017, as space and power move online. New providers continue to enter the market, along with Portman Holdings and Georgia Tech's Coda Tech Square mixed-use development—including retail, office and computing space.
Inventory: 1.4M SF/135 MW
Net Absorption: 1.2 MW
Boston's market continues to be influenced by employment growth and especially General Electric's move there earlier this year. Growth in the tech and life sciences sectors is also benefiting data centers in the area.
Inventory: 3.9M SF/502 MW
Net Absorption: 32 MW
Chicago's utility rates have made the market very appealing. Rates remain within the $0.59 to $0.64/kWh range, and future forecasts are stable, too. JLL predicts cloud demand will continue to outpace supply in Chicago, and product will be limited until Q1 2017.
Inventory: 2.9M SF/403 MW
Net Absorption: 18 MW
Demand in Dallas continues to stem from the financial services, insurance, healthcare and insurance sectors, as headquarters opt to relocate to the area, driving demand.
Denver & Colorado Springs
Inventory: 661k SF
Net Absorption: 2.1 MW
Providers in the area are undergoing some major activity. Construction on ViaWest's Compark facility in Southeast Denver is scheduled to begin in Q4. Once built, the facility will be 140k SF with 18 MW of critical IT load.
Inventory: 762k SF/119 MW
Net Absorption: 1.45 MW
Houston data center demand slowed the first half of the year following the drop in oil prices and its cascading effect on the energy sector. Still, a few key players, like Skybox and Cyrus One, have added new supply.
Inventory: 2.3M SF/210 MW
Net Absorption: 2.4 MW
High power costs in Los Angeles have kept demand flat, though a few key players, namely CoreSite, Digital Realty and Equinix, are driving supply. Chinese telecommunications companies and cloud users are also entering the market in search of space.
Inventory: 1.21M SF/166 MW
Net Absorption: 2 MW
No new providers have entered New York in the past 24 months, and demand has also remained flat, although notably significant is the Sabey's 375 Pearl vacancy, which is pushing down starting rates in the market.
Inventory: 1.1M SF/143 MW
Net Absorption: 14.1 MW
Supply is on the rise in Phoenix as CyrusOne is developing the fourth building at its Chandler campus. West Coast-based companies have been moving to the area, attracted to the healthy number of wholesale products available.
Inventory: 11.2M SF/773.6 MW
Net Absorption: 78 MW
Northern Virginia is seeing historic annual construction, with more than 103 MW underway. Market demand is on the rise as third-party data center providers and cloud providers with their own facilities continue to expand.