- April 1, 2017: Vol. 29, Number 4

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Smaller and bigger: Divergent demand trends underpin a strong 2016 for U.S. data centers

by Jeff West

Despite the perception of slowing demand in second half 2016, occupancy gains across major data center markets in the United States nearly reached the record highs established in 2015. Leasing volume was dominated by a flurry of hyperscale cloud service provider requirements that sometimes reached in excess of 25 megawatts each — typical data center leases are measured in megawatts, not square footage. In addition, the rapid enterprise adoption of network-dependent technologies — mobile devices and networks, the Internet of Things, cloud services, content delivery, etc. — is putting a heightened importance on connectivity and bolstering demand in primary markets.

For the year, net absorption totaled 195 megawatts across the major data center markets tracked by CBRE — Atlanta, Chicago, Dallas/Fort Worth, New York/New Jersey, Northern Virginia, Phoenix and Northern California’s Silicon Valley — slightly below the more than 200 megawatts of absorption in 2015. By a s

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