Demand Fuels Need for Additional Data Center Supply in Phoenix

Article originally posted on Phoenix Business Journal on March 19, 2021

Demand for data center space has outpaced supply in the Phoenix area, but data center companies have plans to eventually add another 250 megawatts, which would nearly double the Valley’s current supply.

In total, the Valley has an inventory of 326.7 megawatts of data center space, only 31.1 of which is vacant, according to JLL research.

JLL measures absorption when the lease is signed for the space, some other companies measure it when the space becomes occupied, which creates some discrepancy when reporting absorption.

“2020 was another record year with 51 megawatts absorbed,” said Mark Bauer, managing director of JLL in Phoenix. Absorption in 2020 nearly doubled the 2019 total of 26 megawatts, he said.

At the end of 2020, there was no new data center space under construction, but Bauer said he expects to see an uptick now that most of the existing space has been taken.

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