Driven by pent-up hyperscale demand from cloud and big data storage users, 4 megawatts (MW) of net absorption was recorded in Southern California data center leasing in the second half of 2020, according to CBRE’s latest North American Data Center Trends Report. The 3 MW of data center facilities under construction in the Southern California region in 2020 were already preleased as pricing held firm in the downtown core due to limited supply. Cloud service providers have been moving deployments closer to end users and are zeroing in on the LA market.

“While net absorption was down year-over-year, this was due to limited wholesale data center inventory, not a lack of demand,” said Jennie Karnes, CBRE vice president. “LA has been overlooked  in the past in favor of primary data center markets. But in support of the continued interest by cloud service providers, we are optimistic about future demand leading to new development and leasing momentum in the greater Los Angeles data center market.”