The data center market nationwide is showing no signs of slowing – with the Boston market leading the pack, according to a new report by Jones Lang LaSalle.
The Boston metro market is one of 14 emerging major datacenter markets in North America, according to Tier1 Research. Tenant retention in the Hub has historically been high, and price competition has increased as owners compete to land tenants prior to new construction hits the market.
There is currently 52,000 square feet of available operations space in the Greater Boston area. Jones Lang LaSalle is currently tracking 62,000 square feet of planned data center expansion. The outlook is for decreasing supply until new construction is delivered in Q3 and Q4 of 2012.
Due to the thawing capital markets, providers and users of data center space are now able to make decisions, releasing years of pent-up demand and resulting in higher deal volume, according to Jones Lang LaSalle’s mid-2011 U.S. Data Center overview.
As more capital floods the market, data center owners and operators will fund more white-floor expansions, leading to an increase in new and existing capacity. The market will absorb quality space from proven providers, as increased technological enhancements of blade servers, cloud offerings and virtual software solutions lead data center users to rethink their strategies and portfolios.
"Energy will continue to be one of the biggest market drivers. As power consumption in data centers continues to increase, users are increasingly concerned with power redundancy, capacity and cost," Bo Bond, co-lead of Jones Lang LaSalle’s Data Center Solutions team.
Jones Lang LaSalle Vice President and data center specialist Greg Zais said: "The acquisition by third party telecommunications giants of four companies who have data centers in Massachusetts has strengthened their financial and competitive positions. The trend points to increasing competition between data center providers. Pricing trends in 2012 will be dependent on whether potential data center demand translates into near term space absorption."
