Along with Northern VA, the Chicago metro area had the biggest increase in annual absorption, and the changes there illustrate some of the challenges that the industry now faces. The demand has led to increasing land prices in the top suburban submarkets like Franklin Park and Elk Grove Village. And several critical substations that serve these towns have reached capacity. In 2017, developers may start to consider sites in new submarkets.

M&A activity, which JLL considers one of the most important industry trends, surged in 2016, and the company expects this continue through 2017. The top providers will probably swallow more colocation companies, and a few key players, such as Equinix and Digital Realty, will grow more dominant. Furthermore, as the need for more powerful sites and faster, better technology goes up, users will have less trust in the industry's newcomers.

“User demand for smart data center solutions will only continue to heat up, with operators feeling the pressure to deliver more data, faster and more flexibly than ever,” says Jon Meisel, managing director and data center solutions market director, JLL. “Smart maneuvering will be necessary for users and operators alike to flourish in the coming months.”

CHICAGO—The demand for data center space intensified throughout 2016, and with the public's appetite for online videos and a growing corporate thirst for the Internet of Things, prospects in the sector look quite bright. In fact, according to JLL's latest Data Center Outlook, some major cloud providers anticipate the need to triple their infrastructure by 2020.

Last year, North American users set new records by absorbing another 357.85 MWs in the top US markets, and 46.3 MWs in the top Canadian markets. Northern VA accounted for nearly one third of the US total, a major boost over the 63 MWs the market absorbed in 2015. Other leading markets were Chicago, which in 2016 saw 56 MWs absorbed, nearly double its 2015 amount, and Dallas, which declined from 42 MWs in 2015 to 36 MWs.

JLL also notes that while demand is strong, it's possible that foreign currency exchange fluctuations, rising interest rates, disruptions caused by mergers and acquisitions, and policy shifts could slow data center growth.

“The data centers' market is very fluid, but a few things are certain,” says Bo Bond, managing director and data center solutions co-lead, JLL. “Cloud adoption is soaring, technology innovation will not slow down, data center portfolios are consolidating and rack densities are ascending rapidly. Companies needed to start their strategic planning yesterday to have any prospect of staying ahead.”