Data Center Demand Hits Near-Record Levels

Near record-levels of demand from cloud, technology and social media companies is teeing up the Phoenix data center market for another strong year. Absorption within metro Phoenix increased from 18.5 megawatts (MW) to 26 MW year-over-year, driving a corresponding increase in new data center construction from 24 MW in 2020 to 32 MW in 2021, according to a JLL report.

This places Phoenix third in the nation on both the absorption and construction fronts. Among the area’s new product are NTT in Mesa and Vantage Data Centers in Goodyear – both under construction and set to deliver new capacity during the first half of 2022. But as demand rises, available land options have decreased and land prices have ballooned as much as 20 to 40 percent in the last six to 12 months. Although second-generation product is expected to help bifurcate the current pricing environment, experts expect Phoenix’s price competitiveness to only intensify in a market that is in major growth mode, says JLL.