By David Liggitt on DatacenterHawk
This research recap is based on the latest release of Hawk Insight, datacenterHawk’s market research product. With Hawk Insight, you can get the most up-to-date data points on data center construction, leasing, and pricing across 25+ markets.
North American Data Center Growth in 1Q 2021
Data center markets across North America kept the momentum going into 2021 after a strong annual performance in 2020.
datacenterHawk’s top 18 markets in North America grew by 2.4% quarter over quarter in commissioned power, which measures data center supply currently delivered in each market.
2020 was one of the strongest demand years in the data center industry, and the market fundamentals remaining in 2021 seem to be strong.
Looking forward to the remainder of 2021, we expect to see a dual strategy from hyperscale companies looking to both lease and own their data center portfolio. There is also increased activity from the enterprise sector, which was less active in 2020 given the COVID-19 challenges. One more area we are watching is powered shell development, which is when a developer/data center operator leases an entire shell facility to a single user on a “NNN” basis. These developments highlight the value large users place on speed to market and flexibility.
Notable North American Data Center Markets in 1Q 2021
Northern Virginia again led North American data center markets in absorption. While most of the demand historically has focused in Loudoun county, there is continuing interest in alternative locations like Manassas and Leesburg.
Demand in Phoenix in 1Q 2021 was greater than the previous three quarters combined. This uneven demand underscores the traditional “lumpiness” experienced across the industry. The uptick in leasing in Phoenix this quarter was primarily driven by hyperscale users focused on maturing their portfolio.
Salt Lake City
Salt Lake City is also emerging as a strategic location and competitive alternative to other West Coast markets. We anticipate further development in the Silicon Slopes during 2021, as more supply comes online and companies look to take advantage of the reasonable costs and tax incentive opportunities.
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