In Santa Clara, the data center capital of the Northern CA region, sites have gotten so scarce that land prices are already moving past $100 per square foot, according to the JLL report. In addition, Bond says other constraints, such as the difficulty in securing building permits, means this market may have reached a plateau, especially with some of its tenants expected to give up space and take advantage of the cloud, keeping prices flat in 2017.

Providers in the Dallas region do not have to worry about any natural land constraints. The flat TX prairie can at least supply all the land any developer could ask for. However, building data centers, more so than office and other industrial uses, requires an advanced energy infrastructure, and even Dallas is currently running short of quality areas, says Bond, and that should further boost land prices for these projects. Still, in 2017 new substations will be delivered in the eastern and northern portions of the metro area.

What has happened in the Chicago region is fairly representative of most other core metro areas, Bond adds. Here, a group of huge data centers took root near the downtown core, but land constraints has forced developers to establish new submarkets in the suburbs. Leasing is now predominantly focused on suburban corridors in Franklin Park and nearby Elk Grove Village, where developers are “buying bigger pieces of dirt.”

New development there has been so robust that the submarket towns needed new substations to keep attracting users. But Bond says Comed, the local utility, “has responded very well. These two communities have answered the call.”

CHICAGO—As reported last week in GlobeSt.com, the demand for data centers has strengthened in markets across the US, especially the top markets such as Northern VA, Chicago, Dallas and Northern CA. In fact, there has been so much expansion in these regions that in 2017 land scarcity will cause many providers to seek out new submarkets, bringing about a significant change in the sector's landscape.

“The market for land is becoming tighter, and the land is becoming more expensive,” Bo Bond, managing director and data center solutions co-lead, JLL, tells GlobeSt.com. “You see that across all of the top markets.”

The Chicago-based JLL just released its year-end Data Center Outlook report, and says that in 2016 users in the top US markets absorbed another 357.85 MWs, a historic high. As usual, Northern VA outpaced all other regions and accounted for nearly one-third of all US absorption.

“There is a gold rush of sorts going on to get the last available land sites,” says Bond. The NVA region has a huge ecosystem that can provide the energy-intensive data center industry all the power it needs. And with even more power capacity set to come online, JLL expects that demand and new supply will be well-matched for several years.

In Santa Clara, the data center capital of the Northern CA region, sites have gotten so scarce that land prices are already moving past $100 per square foot, according to the JLL report. In addition, Bond says other constraints, such as the difficulty in securing building permits, means this market may have reached a plateau, especially with some of its tenants expected to give up space and take advantage of the cloud, keeping prices flat in 2017.

Providers in the Dallas region do not have to worry about any natural land constraints. The flat TX prairie can at least supply all the land any developer could ask for. However, building data centers, more so than office and other industrial uses, requires an advanced energy infrastructure, and even Dallas is currently running short of quality areas, says Bond, and that should further boost land prices for these projects. Still, in 2017 new substations will be delivered in the eastern and northern portions of the metro area.

What has happened in the Chicago region is fairly representative of most other core metro areas, Bond adds. Here, a group of huge data centers took root near the downtown core, but land constraints has forced developers to establish new submarkets in the suburbs. Leasing is now predominantly focused on suburban corridors in Franklin Park and nearby Elk Grove Village, where developers are “buying bigger pieces of dirt.”

New development there has been so robust that the submarket towns needed new substations to keep attracting users. But Bond says Comed, the local utility, “has responded very well. These two communities have answered the call.”