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You are here: Home / Featured / Data Bytes: CBRE Sees 373 Megawatts of Data Center Construction for 2021

Data Bytes: CBRE Sees 373 Megawatts of Data Center Construction for 2021

By Rich Miller - November 16, 2020

Data Bytes: CBRE Sees 373 Megawatts of Data Center Construction for 2021

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More than 373 megawatts of new wholesale data center construction is underway across major markets in the United States, according to a newly-published 2021 market outlook from CBRE. The real estate firm forecasts that total data center inventory will grow by 13.8% in 2021.

“Continued adoption of hybrid information technology (IT) and cloud services, the growth of artificial intelligence (AI) technologies and an ability to support a dispersed workforce will drive industry growth over the next several years,” said CBRE.

The largest market is Northern Virginia, which has nearly 1.3 gigawatts (GWs) of data center capacity, and is also one of the busiest development markets. Here’s a look at how CBRE estimates the inventory and space under development in leading markets:

The top data center markets in North America, according to CBRE.

The top data center markets in North America, according to CBRE.

In 2020, data center demand has been driven by the hyperscale data center operators, led by Google, Microsoft, Amazon Web Services and Facebook. These companies were strong acquirers of leased data center space in 2020 due to the societal shift to online activity during the COID-19 pandemic. As service providers scramble to keep pace with hyperscale demand, they say enterprise customers are cautious about short-term needs as they manage through the pandemic. The impact on the providers has been limited thus far, and analysts see a silver lining within the enterprise buying slowdown, as the pandemic accelerates business automation projects for the “next normal.”

“Hyperscale activity likely will level out in 2021 as demand drivers that spiked in 2020 begin to plateau, including enterprise clients leveraging hybrid IT solutions to accommodate remote working mandates,” said CBRE. “This trend likely will continue, albeit at a slower pace than in 2020.”

Sustainability will be a key narrative in the growth of second-tier markets in 2021.

“As data center technology evolves and allows for more power-dense facilities, many providers are looking to expand in markets that offer affordable clean energy,” CBRE said in its forecast. “Smaller, secondary markets that couple clean low-cost energy, advantageous tax incentives, affordable land prices and network connectivity are poised to see the most growth. Montreal and Hillsboro (Portland), OR, provide hydroelectric power at rates well below those in other markets.”

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