In Phoenix, partnerships with local utilities are helping these data center leaders to work more efficiently by securing easier access to transmission subs. However, other factors such as construction costs and infrastructure investment remain high. For example, infrastructure investment for new data centers can be as much as two to three times the amount to build, another reason why M&A has surged as small providers combine with larger ones to seek sources of capital. The expense is greater for enterprise users that have increasingly shifted from owned facilities to the third party market to offset cost and maintain flexibility through colocation.

"For every penny a data center provider can save in Kilowatt hours (kwH), there is the potential to save millions in operations," said Jon Meisel, East region lead for JLL's data center. "So our clients have to be very strategic with their footprints. It's still about locating near infrastructure-robust metropolitan areas, but it's also about finding ways to be efficient with their locations. If that means placing some part of their footprint in regions with more flexible utility costs, incentives packages or lower taxes, providers will expand into those areas."

Both Aligned Data Centers and CyrusOne are delivering new data center space to accommodate demand. Aligned is in the process of retrofitting a 550,000-square-foot project at 2500 W. Union Hills Dr. in the Deer Valley/North Phoenix submarket. Aligned's $150-plus million retrofit will re-introduce a property that has been vacant for nearly eight years and will also reposition the building to follow the company's platform, allowing users to buy capacity and scale incrementally as compared to traditional colocation providers which operate on fixed contracts.

Skyrocketing demand, low risk of natural disasters and proximity to fiber play key roles in choosing where to locate a data center. Many providers are turning to mergers and acquisitions to keep pace, such as Digital Realty, which recently purchased Telx for $1.9 billion, nearly doubling the provider's footprint and adding substantial services offerings for the company.

"We are seeing clear demand for a complete range of data center solutions," said Matt Miszewski, senior vice president of sales and marketing at Digital Realty. "This acquisition was a strategic move for us, and reflective of what we see in the marketplace. Customers need the reach and support that we are now uniquely positioned to provide in the form of the right service offerings and global footprint."

Added Bo Bond, central region lead for JLL data centers: "We've seen a large acquisition spree take place in the sector which has included many of the publicly traded data center REITs. They're buying to increase their footprint, but also to be able to provide solutions, cloud security and connectivity. This gives companies with larger platforms access to offer more services with a larger geographic footprint. In the end, that's going to benefit the user and increase the reach for those providers."

While local demand has been modest during the first half of 2015, Phoenix is on track for a promising fourth quarter of absorption, comparable to the significant activity achieved in fourth quarter 2014. In preparation for the RealShare Phoenix conference next month, session speaker Will Strong, senior vice president, Cushman & Wakefield, tells GlobeSt.com: "Overall market fundamentals continue to improve in the Phoenix industrial sector. What today's modern users are looking for, build-to-suits over developing spec, where the capital wants to be, and how housing impacts Phoenix all continue to be major topics of conversation."