CBRE’s newly released report examines the following key trends in the North American data center industry:
- Surging demand from hyperscale cloud providers led to a record 303 megawatts (MW) of absorption in the seven primary U.S. data center markets in 2018.
- Development pipelines ramped up in primary markets in 2018 to more than 500 MW.
- To put the scale of development activity into perspective, the amount of under-construction capacity in Northern Virginia is more than the existing inventory of any data center market in the U.S.
- Adoption of hybrid-IT strategies, including combining physical real estate with cloud footprints, continued to shift deployment approaches for enterprises as companies implemented smaller capacity requirements with higher-density computing.
- Asking rents for 250 kilowatts (kW) of turnkey wholesale colocation remained steady at $120 to $140 per kW modified gross at N+1 redundancy. Depending on lease size, an approximate 10% discount is possible for larger hyperscale cloud provider and enterprise users.
- As investment in single assets and portfolios increased, capitalization rates for stabilized data centers approached rates for industrial properties, typically ranging from 5.5% to 7.5%.
Please visit CBRE Data Center Solutions and contact the Data Center team for more information.