The forecast for data center development in the Pacific Northwest: robust expansion, JLL managing director Conan Lee tells us. The reason is that cloud computing and software as a service (SaaS) providers, along with content delivery networks and telecommunications companies, are themselves seeing expansion in the region. That translates into data center requirements and the expectation that demand will increase as the various telecom grids are enhanced, he says.

According to a recent JLL report, Pacific Northwest markets are both major technology hubs with almost 3M SF of existing data center inventory (270 MW capacity) and more than 500k SF under construction or planned (55 MW). In Washington and Oregon, key transactions have this year been completed by CenturyLink, ViaWest and Costco. The growth will eventually drive rents. “Rental rates for colocation space have been stable in both Washington and Oregon, but we see the high current demand resulting in higher rates perhaps as early as the second quarter of next year,” Conan says.