Data Centers, Industrial Projects Compete for Land

Credit: Data Center Knowledge

Data center developments has taken off around the country. Recent data from JLL shows construction increasing from 611.8MW at the end of 2020 to a First Half 2021 volume of 680.8MW.

The record pipeline was set in First Half 2020 with 695MW distributed across 14 markets.

Metro Phoenix currently has 32MW under construction, placing it behind Northern Virginia and Northern California but ahead of Salt Lake City and Atlanta.

Phoenix will likely continue to benefit from development difficulties in California, including the high cost of power.

Despite the increasing appetite for data centers, developers frequently find themselves in competition with other industrial developers for land in their target areas. Traditional industrial developers tend to be more ingrained in given areas and more familiar with development requirements and local processes. Data center developers tend to lack those long-term relationships and are saddled with very specific power and other resource needs.

As a result, data center developers tend to pay premium prices to secure the sites they want, including in Phoenix. JLL notes that, on a national level, limited land availability and cross-sector competition could impede data center expansion, but the firm did not speculate to what extent. (Source)

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