Data centers poised for record year of leasing

Demand is strong after pandemic-fueled dip in 2020, according to CBRE

National Weekend Edition /
Mar.March 13, 2021 12:00 PM
A 351,000 square-foot data center in Ohio. (H5 Data Centers)

A 351,000 square-foot data center in Ohio. (H5 Data Centers)

Data centers appear poised for record growth this year.

A recent CBRE report found that demand is strong, and preleasing suggests 2021 a sustained surge, CNBC reported.

Data centers  — essentially large warehouses filled with computing and data storage systems — are measured in power instead of square footage.

“We know that there’s already 500 megawatts of new build coming online now, almost 70 percent of which is pre-leased,” said CBRE’s Spencer Levy. “And so we do believe that 2021 might be the record year, and then we’ll accelerate thereafter.”

The pandemic’s economic volatility prompted companies to freeze their information technology budgets, causing demand for data centers to dip 11 percent. Despite that, 2020 was still the second-best year on record for leasing, according to CBRE. Data center real estate investment trusts were also the best performing REIT sector in the last year.

Digital Realty Trust, a $41 billion real estate company and one the country’s largest data-center developers, is developing a 600,000-square-foot compound. That announcement, made in the fall, came as it received a major commitment from Bloomberg LP, the parent of Bloomberg News.

Levy said that demand for so-called “edge computing” purposes, like self-driving cars, and remote working outside major cities served by local data centers, will accelerate demand moving forward.

[CNBC] — Dennis Lynch 


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