The Chicago data center market continued its run of positive absorption, with 4.2 megawatts of occupancy gain in the first half of 2017, according to CBRE. “This is due to an extremely limited amount of supply, as no new product has delivered since year-end 2016. As a result, some data center operators have anecdotally shared that they have lost out on transactions because they could not deliver new supply fast enough.”

The nation's 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 MW of positive occupancy gains in the first half of 2017.

As reported in GlobeSt.com, cloud providers have recently stayed on the sidelines. Most of the new leases in the first half of the year were largely by enterprise users with requirements between 500 kilowatts to 1 MW.

“With the bulk of CSP-related activity occurring as pre-leasing in new data center projects, it's not surprising that hyperscale users are temporarily focused on building out and deploying their cloud infrastructure,” says Jeff West, director of data center research, CBRE. “Demand from enterprise users will continue this year as they execute their slow-and-steady migration of IT workloads to cloud and third-party facilities. Meanwhile, all indicators are that requirements from hyperscale CSP users will substantially return.”

CHICAGO—The vacancy rate among data centers in the Chicago region declined to 2.1% – the lowest in the US among primary markets – in the first half of 2017, according to a new report from CBRE. And with supply so tight, developers won't fully meet users' demand until they deliver a pipeline of 40.8 MW currently under construction.

“Chicago remains one of the top markets in the country for data center activity and there remains a lot of interest from large users, but delivery of built inventory is needed before we see significant levels of leasing activity,” says Todd Bateman, CBRE's practice leader for North American data centers.

Investment in US data centers reached record levels in the first half of 2017, totaling $18.2 billion, already more than double than all of 2016. At this pace, data center investment will surpass the total for the three previous years combined.

“Over the past five years, more than $45 billion of investment capital has flowed into the data center sector, with more than 50 percent of that total occurring since the start of 2016,” says Pat Lynch, CBRE's senior managing director for data centers. “The robust adoption of rapidly evolving, data-intensive technology continues on a strong upward trajectory and will drive growth in the data center sector going forward.”

The Chicago data center market continued its run of positive absorption, with 4.2 megawatts of occupancy gain in the first half of 2017, according to CBRE. “This is due to an extremely limited amount of supply, as no new product has delivered since year-end 2016. As a result, some data center operators have anecdotally shared that they have lost out on transactions because they could not deliver new supply fast enough.”

The nation's 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 MW of positive occupancy gains in the first half of 2017.

As reported in GlobeSt.com, cloud providers have recently stayed on the sidelines. Most of the new leases in the first half of the year were largely by enterprise users with requirements between 500 kilowatts to 1 MW.

“With the bulk of CSP-related activity occurring as pre-leasing in new data center projects, it's not surprising that hyperscale users are temporarily focused on building out and deploying their cloud infrastructure,” says Jeff West, director of data center research, CBRE. “Demand from enterprise users will continue this year as they execute their slow-and-steady migration of IT workloads to cloud and third-party facilities. Meanwhile, all indicators are that requirements from hyperscale CSP users will substantially return.”