“While the large hyper-scale users/cloud providers have contributed the most to Northern Virginia demand in 2018, we've still seen a healthy balance of typical wholesale deployments,” says Jamie Jelinek, a senior associate in CBRE's data center solutions group in Northern Virginia.

He notes that in the past several years there have been between 40 MWs to 60 MWs worth of wholesale-sized deals each year. Jelinek adds that trend will continue through the end of this year and into 2019.

“These 1 to 4 MW-sized requirements are sometimes at the mercy of hyperscale deals as some Northern Virginia providers are more focused on leasing full buildings as opposed to leasing data halls one-by-one over the course of 12 to 24 months,” Jelinek says. “As a result, wholesale end-users must be careful in understanding availability and market activity as they run their procurement process.”

Nationwide, strong demand resulted in more than 474 MW of capacity under development in the primary U.S. markets, nearly 55% of which is preleased. U.S. data center investment volume reached $7 billion in the first half of 2018, inclusive of single-asset, portfolio and entity-level transactions, CBRE states in the report.

“We do not expect to see a slowdown in demand from cloud users in the near future, as end-users continue to migrate their IT needs to the cloud to save costs and for added flexibility,” says Pat Lynch, senior managing director, data center solutions, CBRE.

Lynch adds that while investment volume may not reach the record set last year of more than $20 billion, he expects the investment market to post strong results this year, driven by sale/leasebacks from enterprise users, cloud users looking for development partners and a continued influx of new data center investors.