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The popularity of data centers is on the rise with investment in 2017 reaching more than $20B, exceeding the collective volume from the last three years.
“The U.S. data center sector continues to thrive, evidenced by record investment volume, and positive net absorption, and elevated levels of new supply across the major markets," CBRE Data Center Solutions Senior Managing Director Pat Lynch said in a statement.
Regions including Northern Virginia, Silicon Valley, Dallas-Fort Worth, Chicago and the New York Tri-State area witnessed the largest amount of leasing activity across the U.S. An estimated 267 megawatts of wholesale positive net absorption took place in these markets, up from 191 MW in 2016. This could be attributed to the number of tech companies in these regions, such as Amazon and Alphabet, that are increasing data consumption and alerting investors to the possibilities the sector now offers, according to the Wall Street Journal.
A recent CBRE survey found 13% of respondents are actively pursuing investments in alternative sectors such as data centers. This is up from 6% the year prior.
"We have strong expectations for 2018 and beyond as operators, investors and end-users all seek opportunities to maximize efficiencies, enter new markets and utilize new service offerings,” Lynch said.
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