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What’s Fueling 2018 Data Center Demand?
Los Angeles-based CBRE’s 2018 U.S. Real Estate Market Outlook show that despite record-setting wholesale absorption levels for three consecutive years, strong demand for data center space is expected to extend into 2018. That’s mainly thanks to an ever-increasing appetite for data consumption and the rapid evolution of technology.
CBRE’s Pat Lynch says demand drivers included self-driving vehicles, networked homes, and advancements in mobile, interconnectivity and content delivery, demand for data consumption, storage and compute power. He advises, “Investors should focus on primary data center markets such as Northern Virginia, Chicago and Dallas, as well as secondary markets where emerging opportunities exist, including Reno, Minneapolis and Denver.”
CBRE reports capital flowing into the data center space exploded in 2017, as new investors and operators, such as private equity firms, entered the space. Total U.S. investment volume approached a record-level $20 billion for the year. Though investment is expected to be robust in 2018, activity could be tempered by the lack of opportunities and the intricacies of data center assets.
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