Phoenix metro data center leasing on track to surpass 2022 levels

As more companies upgrade their technology, data center space has become limited across the country and has helped push Phoenix to the top tier of metro areas for new data center development in recent years.

The second half of 2022 saw about 124 megawatts of net absorption, or the space leased minus what became vacant, bringing last year’s total absorption to more than 400 megawatts. In comparison, Phoenix had 142 total megawatts of absorption in 2021.

“We had a great year last year in terms of absorption, half a million megawatts — this year right now we’re on track to surpass that already,” said Mark Bauer, a senior managing director and data center solutions group co-leader with JLL. “It used to be ‘Build it and the customer will come,’ now the customer is here and we’re building it for the customer that’s taking it down in the next year, two, even three years.”

Phoenix was second in the nation for data center absorption last year, driven largely by so-called hyperscale tenants that can prelease 30 to 40 megawatts of storage, for example. That can make it tough for retail tenants that need less than 10 megawatts.

This story is posted in partnership with Phoenix Business Journal. Click to read the full story.