CNBC Reports That Data Center Real Estate is Expected to Boom After Pandemic Forces Lives Online

Earlier this week, business channel CNBC ran a piece discussing why Data Centers were the top real estate producers for 2020, and why they’re poised for future growth.  The news piece specifically referred to a report from CBRE.

Key Points Include:

  • Data Centers are primed to set growth records this year.
  • Data Center real estate investment trusts were the highest-performing REIT sector last year.
  • Demand for Data Centers did fall back 11% last year to the second best year on record for leasing, according to CBRE.

According to CBRE’s senior economic advisor, there is currently 500 megawatts of new build coming online now, and 70% of it is pre-leased, leading CBRE to conclude that 2021 will be a record year, as will future years.  The report goes on to say that the area with the most robust growth continues to be Ashburn, VA, due in large part to the less expansive power and redundancy.  While supply grew by 5.9% across the board in major Data Centers, there is little concern that the market is oversupplied.

The report concludes that demand will continue to grow as the economy creeps back to normal levels. Although many Americans will go back to the workplace, they will also continue to work from home, putting continued demand on various streaming services for both work and entertainment.

As with any Data Center construction, it’s imperative for the builders and those operating the Data Center to ensure that their power backup is ready to go at a moment’s notice.  As we learned from last month’s weather events in Texas, this is a non-negotiable when it comes to ensuring uptime.  Be sure to check out some of DSI’s pieces on ensuring adequate power back up power and avoiding pitfalls during a data center power outage.

You can find the entire CNBC report HERE.