Data centers poised for record year of leasing

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

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.”

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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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