JLL has just released its North American Data Center Report. The report covers data center trends plus select local market fundamentals with key insights.
According to the report, the data center market is experiencing strong growth driven by hyperscalers, AI requirements, and the expansion of edge computing. Supply and demand imbalances have resulted in increased preleasing and extended takedown timelines, requiring users to be in the market for capacity well in advance of their preferred go-live date. While AI requirements mean increased demand for operators, they must adapt infrastructure to accommodate these needs and innovate for cooling and efficiency to meet sustainability goals. Despite interest rate volatility, investor demand remains high and will continue to attract diverse financing to fuel growth.
Denver Market Overview:
Supply
The supply in Denver has seen rapid growth with multiple new providers entering the market and current providers growing out their space. Current large construction projects include DataBank which is currently under construction on DEN5 bringing 11 MW to the grid, Flexential with 6 MW in Englewood, QTS with 177 MW planned in Thronton, and Novva Colorado Springs which will be 40 MW upon completion.
Demand
Denver has become the home for some of the fastest-growing tech start-ups in the country which has been a key factor in the growing popularity for data center providers to continue to build out their campuses as well as new competitors joining the market.
Market trends
Aerospace, defense contractors and financial services continue to expand in Colorado, which is driving demand for data centers. Additionally, the City of Aurora and Xcel Energy formalized an incentive package for data centers, and the cost of power in the Denver metro remains well below the national average.
Outlook
- For Users
- Power well below average and continues to drop
- Capacity will keep on disappearing
- Need for data center space in 2 years should be thought about now
- For Providers
- Demand for Denver is growing
- Tech start-ups will fill inventory fast as they grow their companies
- Inventory needed for new lease opportunities
