Report: Phoenix Is Second Most Active Data Center Market

By Christina Estes
Published: Friday, April 12, 2019 - 2:53pm
Updated: Monday, April 15, 2019 - 8:55am

exterior of data center in chandler
H5 Data Center in Chandler.

From the east to the west, more developers are planning more data centers across the Valley. Phoenix is considered the second most active data center market in the nation.

When it comes to construction activity, the Valley ranks just behind northern Virginia in CBRE’s Data Center Trends Report, which covers the second half of 2018. The commercial real estate services firm says data center developers have purchased about 900 acres of land in the last two years.

“This rapid increase in Phoenix’s data center inventory allows users to expand within the market more freely and accommodates the surge in hyperscale and enterprise cloud providers seeking to enter the market,” Mark Krison, senior vice president with CBRE, said in a prepared statement.

Interior of server room
Interior of server room at an unnamed data center.

Growth in streaming services, online gaming and the transition to the fifth-generation of mobile broadband, known as 5G, are driving demand for data center storage. Low risk of natural disasters and tax incentives make Arizona attractive for development.

CBRE said Phoenix registered a record 41.6 megawatts (MW) of net absorption, up more than 580 percent compared to 2017. The seven primary U.S. markets saw a record 303 MW of net absorption in 2018, up more than 16 percent from 2017.

2018 Absorption - Top 10 Most-Active Markets

  1. Northern Virginia: 175.5 MW
  2. Phoenix: 41.6 MW
  3. Dallas-Fort Worth: 38.6 MW
  4. Silicon Valley: 25.1 MW
  5. Chicago: 10.7 MW
  6. Southern California: 10.3 MW
  7. Atlanta: 8.2 MW
  8. Boston: 5.7 MW
  9. Denver: 4.7 MW
  10. Austin/San Antonio: 4.1 MW

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