April 10, 2020
Data center absorption rates in U.S. major markets posted a new record of 396.4 megawatts in 2019, a 33% gain over 2018’s then-record level, says appraisal firm BBG. Although the coronavirus pandemic has led to a spike in data usage in recent weeks, and has impacted data center operations to some extent in the form of temporary staffing reductions, it’s not expected to have a long-term impact either way on what’s already a flourishing sector.
“As the confluence of public, private and hybrid cloud computing strategies drives further expansion of the U.S. data center market, demand for these facilities will continue its upward trajectory as a result of the need to meet expected substantial growth in data usage in the years ahead,” said Chris Roach, CEO of Dallas-based BBG. Chris Roach.
The data-center building boom—interrupted in the short term by state-ordered shutdowns of non-essential construction—has been largely fueled by the rapid growth of cloud computing, says BBG. This has resulted in these facilities becoming one of the fastest-growing commercial real estate property sectors, one which is estimated to reach more than $69 billion by 2024.
More companies are moving all or some of their IT operations to the cloud in order to manage the ever-increasing volumes of data. The data explosion is attributed to more people using the Internet for work, shopping and social interaction.
Northern Virginia continues to remain the largest data center market by far, representing 64% of last year’s total (254.6 MW absorbed). Data center space is measured in absorption rates, and MW, rather than square footage.
Other top data center markets last year included: Silicon Valley (36.5 MW); Phoenix (32.5 MW); Dallas-Ft. Worth (25.8 MW); New York metropolitan area (16.7 MW); Houston (16.0 MW); Chicago (15.7 MW); Atlanta, (14.6 MW), and Austin/San Antonio (12.6 MW).
Pictured: Vantage Data Center campus in Ashburn, VA.
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