NEW YORKNewmark Knight Frank (NKF) released its first half (H1) 2019 Data Centers Report, focusing on industry and market trends in 10 top data center markets in the U.S. — Dallas/Fort Worth, New York, Atlanta, Los Angeles, Chicago, Northern California, Seattle, Phoenix, Northern New Jersey, and Northern Virginia. NKF’s Data Center Report is based on data and trends from datacenterHawk and 451 Research, as well as from the research undertaken by NKF’s Data Center Consulting group lead specialists, Bryan Loewen (executive managaing director for NKF), Victor Frandsen (vice chairman for NKF), and Manuel Breidenbach (director for NKF), and NKF’s Global Knowledge Center.

“After a relatively slow first quarter, second quarter leasing activity picked up, culminating with an overall healthy 118 MW of net new absorption across the top 10 U.S. markets for the first half of 2019,” Loewen said.

NKF’s report elaborates on five major trends impacting data center markets:

1. Increasing partnership and competition with cloud providers.

2. The impact of changing technology and how it will drive demand for vast amounts of data storage and processing capacity.

3. Increasing computing size and complexity requirements, and corresponding improvements to data center infrastructure — both software and hardware systems.

4. How rising chip power and rack density have created a push to liquid cooling alternatives.

5. How climate change and sustainability continue to be a major focus for data center operators.

“Hot button issues impacting data center operation and development include environmental changes and new regulatory requirements which necessitate careful thought and consideration,” Frandsen said. “Data center vendors and providers are becoming more flexible as they adopt new technologies while simultaneously responding to changes related to the infrastructure and efficiency of data center operations.”

The report provides major insights on 10 top U.S. data center markets, including data on energy providers, technology, incentives offered for data center development and operation, absorption, new developments, and recent transactions.

“Each market highlighted in the report has its own opportunities and challenges,” said Breidenbach. “For instance, Seattle offers ‘green’ generated power and correspondingly lower electrical prices, while Phoenix is quickly positioning itself as the next major hyperscale growth market, trailing only Northern Virginia. Northern New Jersey is set to grow substantially in the near future, by 17 MW between now and the end of 2019. Los Angeles remains a ripe development hub, due in part to the city’s connectivity to South America, Australia, and Asia.”

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