North American data center trends and strategy considerations
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Data Center Outlook Favorable conditions remain but a shift is in sight North America 2015
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Transcript of North American data center trends and strategy considerations
Data
Center
Outlook
Favorable
conditions
remain but a
shift is in sight
North America
2015
Data
Centers
What is changing
the market and
influencing real
estate strategies?
State and local
governments are
increasing tax
incentives as a means
to attract data center
development to their
municipalities.
Data
Centers
What is changing
the market and
influencing real
estate strategies?
Industry consolidations
continue as midsized and
large providers acquire
other operators to access
new geographies, expand
business lines and grow
service offerings.
Data
Centers
What is changing
the market and
influencing real
estate strategies?
The internet of things,
software-defined data
centers and disaster
recovery emerge as
demand drivers.
Data
Centers
What is changing
the market and
influencing real
estate strategies?
Large providers look
overseas to emerging
markets where the
mismatch between
supply and demand can
provide higher returns.
Data
Centers
What is changing
the market and
influencing real
estate strategies?
Vacancy declines due
to the organic growth of
current tenants, trend
toward outsourcing and
adoption of cloud
services.
Data
Centers
What is changing
the market and
influencing real
estate strategies?
Transaction activity
starts to spread out
across markets.
Data
Centers
Leading indicator
of demand:
employment in
data processing &
hosting services
will continue on
its growth path
Source: IBISWorld, June 2015
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2006 2008 2010 2012 2014 2016 2018 2020
Employment
Data
Centers
While the primary
markets continue
to see the most
leasing activity,
secondary
markets are
starting to
catch up
Source: JLL Research
2.0 0.8
14.0
16.6
2.2
5.5 4.0
7.6
4.0 6.0
9.0
31.8
7.9
24.0
27.6
15.0
2.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0A
tlant
a
Aus
tin &
San
Ant
onio
Chi
cago
Dal
las
Den
ver
Hou
ston
Los
Ang
eles
Las
Veg
as &
Ren
o
Min
neap
olis
& S
t. P
aul
New
Yor
k C
ity
Nor
ther
n N
ew J
erse
y
Nor
ther
n V
irgin
ia
Pho
enix
Sea
ttle
& P
ortla
nd
Sili
con
Val
ley
Gre
ater
Tor
onto
Are
a
Van
couv
er &
Cal
gary
2015 YTD Absorption (MW)
Data Centers Top 10 markets for data
center construction.
40,000
53,600
60,000
89,000
110,000
155,000
203,000
236,000
345,595
352,000
0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000
Atlanta
Austin & San Antonio
Las Vegas & Reno
Dallas
Phoenix
Houston
Northern Virginia
Silicon Valley
Chicago
Seattle & Portland
2015 Under Construction (s.f.)
Source: JLL Research
Data
Centers
Market outlook
User favorable market Neutral market Provider favorable market
Q2 15 Q3 15 Q4 15 Q1 16 Q2 16
Q2 15 Q3 15 Q4 15 Q1 16 Q2 16
Q2 15 Q3 15 Q4 15 Q1 16 Q2 16
Q2 15 Q3 15 Q4 15 Q1 16 Q2 16
Q2 15 Q3 15 Q4 15 Q1 16 Q2 16
Q2 15 Q3 15 Q4 15 Q1 16 Q2 16
Q2 15 Q3 15 Q4 15 Q1 16 Q2 16
Q2 15 Q3 15 Q4 15 Q1 16 Q2 16
Q2 15 Q3 15 Q4 15 Q1 16 Q2 16
Atlanta
Austin & San Antonio
Chicago
Dallas
Denver
Houston
Los Angeles
Las Vegas & Reno
Minneapolis & St. Paul
Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Northern Virginia
New York City Q2 15 Q3 15 Q4 15 Q1 16 Q2 16
Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Northern New Jersey
Q2 15 Q3 15 Q4 15 Q1 16 Q2 16
Q2 15 Q3 15 Q4 15 Q1 16 Q2 16
Phoenix
Seattle & Portland
Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Vancouver & Calgary
Silicon Valley Q2 15 Q3 15 Q4 15 Q1 16 Q2 16
Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Greater Toronto Area (GTA)
© Copyright 2015 Jones Lang LaSalle
Lauren Picariello
Director of Industry Research
Americas
+1 617 531 4208
Thomas Forr
National Research Coordinator
Canada
+1 416 304 6047
Learn more… •2015 Data Center Outlook
•us.jll.com/data-center-trends
•
