Data Center Demand Reaches Record Levels in the West

Demand for data center demand is rapidly rising around the globe, and Western US cities are among the top markets. A new report from JLL calls data center demand “insatiable” and lists Phoenix, Las Vegas and Los Angeles as the top markets for data center absorption in 2018. In fact, Phoenix ranked third in the world for absorption, behind Northern Virginia and London. The market had 51 megawatts in absorption activity last year.

“Data center demand in Phoenix is still fueled by all of the benefits that made it a top tier market in the first place—low cost of power, lack of natural disasters and cheap dirt compared to other primary data center destinations like Virginia and Northern California,” Mark Bauer, managing director at JLL, tells GlobeSt.com. “This is enhanced by the Arizona Computer Data Center program, which abates sales and transaction privilege taxes for qualifying data center operators, developers and end user customers. It is one of the most attractive data center-centric programs in the country.”

Las Vegas has a similar story, with rising demand for data centers and similar market drivers to Phoenix. On the JLL report, Las Vegas was also among the top markets in the world for data center absorption last year, with 37 megawatts in absorption. “Las Vegas has a lot of advantages that make it attractive for data centers, including its close proximity to California, renewable energy options and available capacity and low cost of power,” Bauer says. “This will only continue to grow the local data center environment, particularly as a major network hub for media and entertainment. The tax incentives and special utility pricing that Las Vegas offers is also very appealing to large-scale deployments.”