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As Data Center Developers Complete More Facilities In Bay Area, Many Look To Future Impacts Of 5G

Demand for data centers is only expected to rise in the coming years with the advent of 5G and increased demand for lower latency by end users. That has meant building more high-powered data centers and facilities that are closer to users.

Data center firms fifteenfortyseven Critical Systems Realty in San Francisco and Vantage Data Centers in Santa Clara have already been building data centers that can meet the needs of future users. In San Francisco, 1547 is working on the city’s first data center in the last 10 years, while Vantage Data Centers continues to increase its capacity in Santa Clara.

These projects will be discussed during Bisnow’s upcoming Data Center Investment Conference & Expo, West Nov. 29.

fifteenfourtyseven Critical Systems Realty President John Bonczek

San Francisco’s 400 Paul development site proved to be an ideal location for fifteenfourtyseven's data center since its is adjacent to 200 Paul, one of the most interconnected buildings in the city, 1547 Critical Systems Realty President John Bonczek said. The 400 Paul site has network availability from all the major providers that are built into 200 Paul or run past it.

“It was no easy task,” Bonczek said of the San Francisco development. “The permitting and approval process took a number of years, which is a feat that we tackled. We’re seeing significant demand for large footprints in that building already.”

The facility will focus on providing retail co-location services, which have been underserved in the market, he said. Retail co-location typically houses multiple tenants sometimes by the rack or cabinet.

“There is a limited amount of retail co-location that gets you access to that kind of network and we believe we will be able to fill that gap,” Bonczek said.

Bonczek anticipates the building to have the powered shell completed within 12 months. The design will allow for maximum flexibility where users can come in and build out their own data center infrastructure or task 1547 with building turnkey data center infrastructure for them. The company is actively leasing at its San Francisco facility.

Rendering of a data center at 400 Paul Ave. in San Francisco

Vantage Data Centers Chief Commercial Officer Lee Kestler said its latest construction project in Santa Clara completed in September and is already 50% leased. The 15 megawatt facility, V5, brought its Santa Clara campus capacity up to 75 MW. Vantage's next under-construction campus in Santa Clara will add 21 MW to its portfolio and is expected to open in July.

“Silicon Valley is still an extremely stable market,” Kestler said.

While Silicon Valley may not compare to the exponential growth in the Northern Virginia market, where Vantage also has been very active, Silicon Valley is going to be a market with reasonable expectations for absorption, he said. Silicon Valley has been the strong foundation of software and hardware development, while Northern Virginia is providing a portal of internet connectivity in the eastern U.S.

The Bay Area is a market where companies developing software and distributing it to the masses still need a presence, he said. Santa Clara also has a combination of lower-density users and high-density users that require special rooms and higher electrical consumption, Kestler said.

“Santa Clara is a melting pot of the evolution of the data center business itself,” Kestler said. “The Santa Clara campus has evolved into a unique petri dish of what’s happened across the data center industry.”

5G Will Only Increase Data Center Demand

Vantage Data Centers' Santa Clara campus

In addition to meeting the needs of today’s users, data center developers are keeping in tune with what the next generation of wireless technology, 5G, will mean for current and future data centers.

“5G is all a buzz,” Bonczek said. “It will create so much more bandwidth to end users that it is going to really enable a lot and not just autonomous vehicles, but autonomous flying vehicles and all new ways to provide technology to transportation.”

And 5G will only create more demand for content storage and delivery.

“Data centers will continue to flourish because content will have to be that much more available to end users and have the lowest amount of latency,” he said.

He said 1547 has long focused on edge facilities and markets with the highest densities and high populations. The upcoming trends are simply a validation of the company’s focus, he said.

Vantage Data Centers Chief Commercial Officer Lee Kestler

Vantage also is gearing up for what 5G might mean for the data center market. Vantage, which specializes in hyperscale data centers, will have plenty of capacity to manage the higher computer needs that 5G will likely produce.

“Hyperscale data centers continue to be the heartbeat [of Vantage],” Kestler said. “We are one of the only providers that are primarily focused on hyperscale.”

These campuses typically have a capacity of 40 MW to upward of 100 MW and primarily cater to large-capacity customers, such as cloud providers, that may need megawatts instead of kilowatts of space. Whereas a typical data user may need 4 KW to 6 KW per rack, a hyperscale customer may use 10 KW to 30 KW per rack and need a rack as high as 9 feet instead of a typical 6-foot rack, Kestler said.

Vantage will provide physical electricity and cooling capacities while the user will manage its own network and computing resources, Kestler said.

Vantage also is planning to build a 70 MW data center in Quincy, Washington, which the company views as a strong destination market, Kestler said. The Pacific Northwest has cheap renewable electricity available and a lot of technology and cable landings.

“We’re actively looking in other locations that allow hyperscale to accommodate whatever those 5G technologies are,” Kestler said.

Find out more about the latest developments from fifteenfortyseven Critical Systems Realty and Vantage Data Centers and the impact 5G will have on future developments at Bisnow’s Data Center Investment Conference & Expo, West Nov. 29 at the San Jose Marriott.