(WEB HOST INDUSTRY REVIEW) — The demand for data center space is outpacing the supply by three times in the United States, said Jim Kerrigan, EVP and director of the National Data Center Practice at Grubb & Ellis in his presentation Tuesday at the DatacenterDynamics (www.datacenterdynamics.com) conference.
This is a drastic turn around from the lack of US high-tech real estate leasing activity seen in the first half of the year.
Kerrigan says that 32 percent of the leased data center space is up for renewal between now and 2013, while colocation and wholesale data center prices are up by 15 percent.
There is also stronger demand for smaller transactions, specifically, for facilities with a capacity of 300 to 800kW. Data center operators are increasingly using modular designs, with POD sizes from 9,000 to 10,000 square feet.
Other data center trends include the market comprising mostly of social networking, virtualization platform providers and hosting providers.
Kerrigan adds that organizations in the healthcare sector are also expected to increase their footprint as more organizations begin to digitize their medical records and the stimulus package funds continue to be distributed.
Chicago is currently leading the rest of the country in colocation services, while latency is increasingly becoming an important factor for data center operators that target the financial sector.
Wholesale space in Chicago is also running out, with only two wholesale spaces in the downtown area offering at least 10,000 square feet.
However, the largest demand for wholespace is currently in Northern Virginia, with recent data center footprint expansions by Digital Realty Trust and Equinix. In contrast, California’s Silicon Valley data center demand has slowed down in the past 14 months.
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