WASHINGTON, DC–Even as investment in the US data center sector continues to climb — it has reached record levels in the first half of 2017 — Northern Virginia remains the largest and most active data center market in the world, according to a new report from CBRE.
Investment in data centers totaled $18.2 billion in the first half of the year, more than double that for all of 2016, it reports. In addition, the US' seven major data center markets — Atlanta, Chicago, Dallas/Ft. Worth, New York Tri-State Region, Northern Virginia, Phoenix and Silicon Valley — combined saw nearly 88 megawatts (MW) of positive occupancy gains in the first half of 2017, according to the report.
“Over the past five years, more than $45 billion of investment capital has flowed into the data center sector, with more than 50% of that total occurring since the start of 2016,” according to a prepared statement by Pat Lynch, senior managing director, Data Center Solutions, CBRE.
With net absorption totalling nearly 42 MW for the first half of the year, Northern Virginia in particular remains a strong outperformer; indeed the submarket is the largest and most active data center market in the world, with its wholesale inventory larger than that of any country in Europe or Asia Pacific, according to CBRE.
Northern Virginia also remains the most active development market, with more than 10 new projects (119 MW of wholesale capacity) in the pipeline as of the end of the first half of 2017. Other markets with significant construction activity include Dallas/Ft. Worth (47 MW), Chicago (41 MW), Silicon Valley (30 MW) and Phoenix (28 MW).
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A separate JLL report issued earlier this year came to similar conclusions about the Northern Virginia market. As of December 2016, Northern Virginia leads the North America Data Center Market with over 30% of the market share and a record of 113.0 Mega-Watts (MW) absorption of the total 357.85 MW in the top U.S. markets, according to JLL's 2017 Data Center Outlook; nearly double that of the nearest competing market – Northern California at 59.1 MW.
In particular Prince William County is benefiting from the activity, the county reports; recently it announced that it had surpassed 3.5 million square feet of data center space over 31 economic development projects. The county has also identified over 10,000 acres designated to support data center commercial interests.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
