How NoVa Became No.1 In Data Center Absorption

WASHINGTON, DC—Over the last two years, Northern Virginia has moved to the top of the list of the five major US data center markets in terms of market absorption, according to JLL. The region now accounts for 24% of market absorption, JLL Managing Director Allen Tucker tells GlobeSt.com. The nearest competition comes from Dallas and Silicon Valley, each of which claim 14% of total market absorption. The top five markets also include Chicago and the Pacific Northwest.

Northern Virginia, of course, has always been one of the top markets for data center use and development. But in the last two years it has seen especially strong growth,  JLL says.

In the last two years, for instance, Northern Virginia has absorbed about 110 megawatts of power -- a metric that translates into 1.3-million square feet of data center space. That is a significant step up from the 39 or so megawatts (1-million-square feet) that it was absorbing on a yearly basis for the seven years preceding that.

What fueled Northern Virginia's rise? Some thoughts, per the JLL report. To be sure, not one of these factors can be isolated as THE reason for the growth and certainly data centers in other regions benefit from, say, local economic incentives and are aggressive in using new data center technology. But all together it adds up to the No. 1 spot.

1. Local economic development agencies do everything they can to encourage data center development.

It is no-brainer for them. These projects deliver comparable economic benefits as office or retail development but do not require as much supporting infrastructure, such as roads or schools, Tucker said. Data centers also don't require nearly as much land either.

For example, he said, the data center absorption that Loudoun experienced in the last two years would be equal to the 35 100,000-square foot corporate headquarters establishing in the county in terms of economic impact.

2. Local data center developers are strategic in the technology they deploy. For example, a big focus has been on turnkey data center space with new progressive stable designs to meet enterprise user demand, JLL said.

3. Northern Virginia had a head start. The area is the birthplace of the Internet, Tucker said. "Seventy-five percent of all global Internet traffic flows through Ashburn, VA."

The area had a head start in putting fiber in the ground as well, which is a significant advantage as such infrastructure can take time to put in place.

4. Power is cheaper in Northern Virginia. Certainly compared to Maryland it is cheaper, Tucker said.

In Northern Virginia, by contrast, utility costs have hovered around 6 cents per kWh for the last five years, compared to the national average of 7.4.

5. Web 2.0. Uber, Netflix, Amazon, AWS, and thousands of thousands of similar consumer and business applications that have followed suit.

They all need the Internet to connect to their customers