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Why There's A Robust Year Ahead For Phoenix Data Centers

This year already has started out as an active one for the Phoenix data center market. Boston-based Iron Mountain kicked off the new year by finalizing its acquisition of Phoenix-based co-location data center services provider IO Data Centers.


"One of the cornerstones of the IO transaction is that it enhances our geographic diversification with expansion capacity in Phoenix, the fourth-fastest market for absorption in the U.S. in 2017," Iron Mountain Data Centers Senior Vice President Mark Kidd said. 

"The new leasing activity is an important example of our diverse customer base, with growing requirements for co-location capacity," he said.

In the deal, Iron Mountain acquired four data centers, with two in Phoenix and Scottsdale, and one each in Edison, New Jersey, and Columbus, Ohio. 

The data center space in the four facilities totals 728K SF, providing 62 megawatts of capacity with expansion potential of an additional 77 MW in Arizona and New Jersey.  

The acquisition closes with a customer expansion at the Phoenix data center campus by Cyxtera, a provider of data infrastructure to companies and the federal government. Cyxtera's 2 MW expansion points to the continued demand for data centers in the Phoenix market, according to Iron Mountain.

H5 Data Centers Chief Operating Officer David Dunn

The Iron Mountain deal capped an active year for data centers in Phoenix, but there is more to come. Phoenix has momentum because it has been one of the top data center markets in the United States for the past decade, H5 Data Centers Chief Operating Officer David Dunn said. 

"One of the safest and stable locations in North America, Phoenix presents a strong opportunity to be the data center workhorse for the proximate population centers of California."

The market has a number of factors going for it, including attractive energy pricing and favorable tax rules regarding information technology equipment purchases.

"Phoenix is well-positioned for the next decade of data center growth," Dunn said. 

Both Kidd and Dunn will be speakers at Bisnow's Phoenix Data Centers event March 28.