Contact Us

Multistory Data Centers On The Rise In Dense Markets

With land growing scarce in the leading data center markets, expect to see data centers grow taller, denser and more sophisticated. 

2020 was a record year for data center development, and industry players expect the growth to continue even in the event of a prolonged economic recession. According to a recent survey by Turner & Townsend, 85% of data center professionals predict that construction demand in 2021 will be even higher than it was last year, and a majority don’t see a recession slowing down demand.  

Northern Virginia, the world’s largest data center market, may serve as a bellwether for development trends. 


“We’ve been anticipating and encouraging more efficient land use, and taller data centers, as land has become more scarce,” said Buddy Rizer, executive director of economic development for Loudoun County, Virginia. “Anywhere between three to five stories probably makes a lot of sense.” 

Equinix, a colocation giant, is among the companies looking to go vertical. On its DC21 campus in Ashburn, Equinix is planning a fleet of four-story data centers to complement its existing facilities.

"[The campus] is the single most-dense interconnection hub in the U.S,” wrote Jon Lin, president of Equinix’s Americas business.

“In the primary core markets, we’re looking at four-story buildings. Even for rural locations, we’re looking at two-story facilities, and that is without question increasing the power density,” said Neil Sheehan, principal at Sheehan Nagle Hartray Architects, which designs data centers in the U.S. and Europe.

Density comes with two main benefits: One, it increases the amount of power a developer can pack into a single site. It also improves network connections by decreasing the distance between sites, which in turn lowers latency. 

With demands on data consumption rising, builders are also figuring out how to future-proof data center facilities, as well as to navigate a skill shortage in the growing but still specialized field of data center development. 

“We’re also seeing the power demand on the data floor rising. That’s something that everyone in the market has anticipated for many years, but over the past couple of years we’re really seeing that kick in,” Sheehan added. “There is some uncertainty in the market about how much of that demand for power is going to increase. ... If you didn’t anticipate the increase in power, you may not be serving the client.” 

There are other market forces affecting how data centers are built today. One is an increasing demand for renewable energy, which, on some development sites, could mean on-site installation of solar panels. That’s a tricky engineering problem, Sheehan added. 

“There are developers presently looking at strategies for developing not only the data center campus but the power to feed the data center campus at the same time,” he said. “All of that power generation can’t just stand by itself; it has to tie into the grid as well, and the complexity of how that dedicated power source connects with local and regional infrastructure is an interesting challenge.” 

With data center demand running high and capital pouring into the sector, builders are balancing timing, budget and a need for innovation, added Whitney Villalobos, head of industrial, high-tech and manufacturing at Turner & Townsend. 

“Schedule is king, budget is very important, and a lot of these providers are chasing innovation,” Villalobos said.

But to some extent, broad-based innovation is constrained by the “insular” nature of the data center industry, where demand for skilled talent and contractors far outpaced the available supply of labor. That’s playing out in higher costs and other challenges on builds and is one of the primary challenges facing the industry this year, Villalobos added. 

“As the labor market is constrained and demand is increasing, [developers are] unable to find enough people with experience in the industry,” she said. “Upskilling a local force is going to be key going forward.”