A recent CBRE survey on datacenter trends reports that Phoenix is one of the fastest growing markets for new centers, ranking fifth. Rental rates have increased 20% over the last 12 months, hyper scale lease activity has increased while inventory has declined. There has been an increase in activity from out of state technology. However, the segment is hampered due to the fact that Arizona Public Service and the Salt River Project have reported longer delays for quality redundant power delivery.

In terms of activity, Aligned Data Centers paid $115 million to purchase an older office project for conversion to a data center space and STACK Data Centers purchased 80 acres in central Phoenix for a new data center campus.

The segment has been constrained by two key factors, “Data center leasing slowed in the second half of 2022, but this was driven purely by a lack of available space and power constraints,” said CBRE’s Pat Lynch.