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Can a Data Center Market Be Too Healthy?

The Phoenix data center market is almost exceedingly healthy, with demand outpacing supply, says Mark Bauer, JLL managing director. That demand almost doubled the market’s data center absorption – from 26 to 51 megawatts during the past 12 months to place Phoenix in the number three spot for total U.S. data center absorption, just behind North Virginia and Chicago.

“Our job moving forward will be construction,” says Bauer. “Hyperscale cloud companies, corporate operators, colocators and booming industries like finance, healthcare, social media and software are all hot on Phoenix, not only for our competitive rental rates but also our affordable power rates, which have continued to decrease since 2016, now sitting at 6.3 cents per kWh.”

While construction came to a virtual halt in 2020, Phoenix has approximately 250 megawatts within almost 1 million square feet in the pipeline. That will almost double the Valley’s data center megawatt capacity (currently at 326.7 megawatts) by major players such as Compass, Stream, QTS, NTT, EdgeCore, Iron Mountain, CyrusOne and Aligned, according to Bauer.

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About Lisa Brown

Lisa Brown has decades of experience in corporate communications and marketing management with organizations including Coldwell Banker Residential, Grubb & Ellis, Marcus & Millichap, NAIOP, SIOR and ALM. In those positions, she worked in conjunction with chief executive officers and chief marketing officers to create corporate messaging, cohesive branding standards, strategic marketing plans and thought pieces. Brown is a frequent speaker at industry events and an editing adjunct professor for an online course. She has a master’s degree in mass communications from San Jose State University.

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