Stream Data Centers and H5 Data Centers Announce Phoenix Market Expansions

As one of the industry's strongest growth markets, Phoenix, Arizona is well in the midst of a long, ongoing data center building boom and is on the short list of major U.S. growth markets for cloud computing.

In recent years, Phoenix has been one of the world's most active markets in terms of hyperscale demand and development. Data center operators that have anticipated this dramatic growth and have chosen to develop campuses in the region are capitalizing on hyperscale activity in the market. Cited as the fifth-largest data center market in the U.S. and ninth-largest globally in 2023, according to JLL, as of 2023 the greater Phoenix data center market has a total power inventory of 587 MW, with 267 MW under construction.

As further noted in a recent DCF special report on this geography, "The Phoenix market is home to 2.6 million square feet (SF) of commissioned data center space, representing 458 megawatts (MW) of commissioned power at the end of the first quarter of 2022, according to market research from datacenterHawk. These metrics place Phoenix as a top five market for data center capacity in the U.S., joining Northern Virginia, Silicon Valley, Dallas and Chicago."

As reported by DCF, companies such as Prime and Stack have recently entered the Phoenix market with massive new data center campuses.

As DCF has also previously reported, the burgeoning suburb of Goodyear, a town of about 80,000 located about 17 miles west of Downtown Phoenix, is now also home to colocation and cloud data centers from the likes of Microsoft, Vantage, Compass, DCX, Amazon Web Services, and others, including Stream Data Centers. 

Numerous factors have contributed to growth of data centers in Goodyear, including a welcoming business environment, affordable electricity and competitive real estate costs. Goodyear is located less than 20 miles from Phoenix, the third most fiber-connected market in the U.S., which offers well-established infrastructure with low latency and high availability key for mission-critical computing applications that require proximity to a robust fiber network.

Stream Ready to Build Out In Goodyear

Dallas-based Stream Data Centers has been a provider of data center services since 1999; the company states that 90% of its inventory is leased to Fortune 100 customers. To date, Stream has acquired, developed and managed 24 data center campuses nationally.

In 2019, Stream Data Centers purchased a 160-acre land site in Goodyear for construction of a 2 million SF data center campus. The site had an existing 418,000 SF building, which the company set about converting into a 50 MW data center. Dubbed Phoenix I, Stream delivered its first 4.5 MW hall in 3Q 2020, as the first of five buildings planned for its Goodyear campus.

Also in 2020, Stream connected its Goodyear campus to the Cox Business fiber network. The agreement with Cox Business allows tenants to interconnect their Stream services with other data centers or to their local offices using either dark fiber or internet transport services. The Phoenix development has continued Stream Data Centers’ strategic focus on the hyperscale data center market.

Now, the Phoenix Business Journal on July 3 reported that Stream Data Centers is set to build out the remaining sites in its 2M SF Goodyear footprint, which sits adjacent to the Microsoft data center campus and a substation from Arizona Public Service Electric Company (APS) that can bring the site’s power capacity to 350 MW.

As revealed by Phoenix Business Journal reporter Audrey Jensen:

“Stream has received the first approvals needed from the city of Goodyear for its site plans and for an additional rezoning of the remaining property it owns for five new buildings each totaling about 400,000 square feet with two stories across 104 acres...Goodyear's planning commission gave a recommendation of approval to rezone the property by adding a planned area development to the light industrial zoning to allow for the buildings to use air-cooled chillers on the rooftops that are screened from view with a wall....Stream plans to use a closed-loop air cooling system featuring roof-mounted chiller, which it said in project documents will result in a significant reduction of water usage compared to other methods of cooling...A site plan for the project was also recently approved, city documents said.”

Phase 3 for H5 in Chandler

Meanwhile, approximately 41 miles to the southeast in Chandler, Arizona, Denver-based H5 Data Centers on June 29 announced a 30,000 SF expansion of its Phoenix market colocation facility located at 2600 W. Germann Road.

Chandler has emerged as a favored location for data center operators in the Phoenix market. H5 entered the Phoenix market in 2016 with its acquisition of NextFort, operator of a 180,000 square foot data center in Chandler which it turned over to H5. H5’s neighbors in Chandler have included data centers for Digital Realty, CyrusOne and eBay.

The third phase of development at the national colocation and wholesale data center provider's 180,000 SF Phoenix campus adds needed infrastructure capacity to meet growing customer demand in Arizona.

Serving enterprises and cloud service providers, H5 said its Tier III Phoenix data center offers up to 26 MWs of IT load, with a waterless design and the ability to support power densities of 20+ kW per cabinet. The data center provides access to multiple metro fiber providers and communications carriers and qualifies for Arizona-state sales tax abatement incentives.

Phase 3 improvements to the H5 Phoenix data center include additional 30,000 SF of data center and infrastructure space, with up to 6 critical MWs of additional power, the ability to support an additional 530 customer cabinets, and development of additional office and storage space.

Josh Simms, chief executive officer of H5 Data Centers, commented, "H5 Data Centers constructs data center designs for the needs of our rapidly-growing enterprise and cloud services customer base. The demand for Phoenix colocation space and services continues to be strong from enterprises due to Arizona’s attractive power costs and the data center sales and use tax incentive program."