With more than 373 megawatts of new data center capacity under construction, CBRE is forecasting that total data center inventory will grow by 13.8 percent in 2021.
CBRE’s forecasts come from its 2021 Market Outlook, which covers the real estate market and market factors, including the impact of the pandemic and the increasing use of renewable energy. [Editor’s note: data center capacity is measured in net absorption of megawatts.]
According to CRBE’s 2021 Market Outlook: “The U.S. wholesale data center market continues to benefit from the critical role that data centers play in supporting business operations. Continued adoption of hybrid information technology (IT) and cloud services, the growth of artificial intelligence (AI) technologies and an ability to support a dispersed workforce will drive industry growth over the next several years.”
According to CBRE, data center growth was most robust in Northern Virginia— which for several years has been the nation’s largest data center hub—and the Dallas/Ft Worth, Chicago, Silicon Valley, Phoenix, New York and Atlanta markets. However, CBRE says it expects the data center market to begin leveling out in 2021 as demand starts to plateau. With 1.3GW of capacity, Northern Virginia is by far the largest data hub.
As more and more companies begin to adopt a cloud or hybrid-cloud approach, the growth potential dims smaller providers. According to CBRE, facilities with “potential for scalability, high connectivity and proximity to cloud on-ramps” are better positioned, “than older, smaller assets with less ability to support the evolution of data center technology.”
Posted from: Business Facilities / Jan-Feb 2021 Issue