California CRE News In Your Inbox.
Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.
Silicon Valley Sees Second Highest Year-Over-Year Data Center Inventory Growth
Silicon Valley, historically constrained by limited wholesale data center inventory, saw that scarcity begin to alleviate with the delivery of 63 megawatts (MW) of new supply in 2017, ranking second only to Northern Virginia among major U.S. data center markets, according to a new report from CBRE.
The market soared over historical averages to also rank second for annual net absorption, seeing an incremental 61.5 MW of space occupied at the end of 2017.
Year-end vacancy stood at 5.1%, down 140 basis points year-over-year, and representing 11.5 MW of existing available wholesale capacity. Capacity under construction totaled 21 MW at year-end, with 100% of that inventory available. Rapid absorption of this new supply is expected as is continued development activity.
CBRE’s Jennie Karnes says, “While the addition of new supply will temporarily ease the tight market conditions in Silicon Valley, we expect highly competitive user interest for this new first-generation space stemming from what has been a very strong pent-up demand pipeline for the past several quarters. Given the limited development opportunities still existing in Silicon Valley, we expect the market to remain largely under-supplied going forward.”
For comments, questions or concerns, please contact Dennis Kaiser
