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California  + Los Angeles  + Industrial  | 
Data Center

Limited Inventory, Not Demand, is Behind Data Center Absorption Decline

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.”

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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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