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SoCal Data-Center Demand Increases

Carrie Rossenfeld Office

As the use of technology continues to grow, so does the need to store data collected. Market activity for data centers in the Southern California region picked up considerably during the first half of 2018, according to a report distributed by representatives of CBRE. The statement accompanying the report says demand from technology, entertainment, and healthcare companies drove net absorption for data-center space during H1 to 5.2 megawatts (MW).

According to the statement, SoCal has added 16 MW of inventory since the first half of 2017 to meet the increasing need for data storage, bringing the year-over-year grand total to 104.4 MW, with an additional 3.2 MW in the pipeline. The new deliveries have had an impact on the vacancy rate, the statement says, with new supply raising the region’s vacancy rate by 250 basis points year-over-year to 18.8 percent.

The statement also says CoreSite was the primary contributor to the SoCal market activity, beginning construction in Q2 2018 on 28,191 square feet of turn-key data center space at LA2 just outside Downtown Los Angeles, which is near capacity. Another 18 MW of capacity at the firm’s three-story LA3 is expected to deliver at the end of 2019, the release says.

Kristina Metzger of CBRE’s Data Center Solutions practice in Southern California is quoted in the release as saying, “Southern California serves as a major connection point between the U.S. and Asia Pacific, making it attractive for end users.” She adds that the market — particularly downtown Los Angeles — “benefits from connectivity-dense colocation and the resulting lower latencies.”