Phoenix Market Overview
Market Size and Growth
- Current Data Center Space: 1.97 million square feet (SF), representing 295 megawatts (MW) of commissioned power.
- Future Planned Capacity: Approximately 1.6 gigawatts (GW) of power and nearly 8.8 million SF of space.
Supply and Demand Balance
- Vacancy Rate: 10.5% as of Q4 2020, slightly higher than the 2018 rate of 9.4%.
- Commissioned Space: 31 MW at the end of 2020.
- New Capacity Under Construction: About 12 MW.
Key Trends
- Leasing Activity: 10.1 MW in Q4 2020.
- Build or Buy: Companies are exploring both pre-leasing and speculative building strategies.
- Emerging Data Center Districts: Mesa and Goodyear are developing competing "data center districts."
- Impact of Pandemic: Cloud deployment patterns may shift due to the ongoing pandemic and recovery.
Key Benefits of Phoenix for Data Center Customers
- Low Natural Disaster Risk: No significant history of seismic, tornado, or flooding events.
- Inexpensive Power Costs: Diverse fuel mix and competitive power environment.
- Tax Abatements: 10-year waiver on state, county, and local sales taxes on equipment purchases and labor services.
- Competitive Colocation/Cloud Environment: Significant investment in quality colocation and cloud providers.
Economic Context
- Employment: Arizona has rebounded to pre-2007 conditions, employing 2.93 million people with over 80,000 new jobs in 2019.
- Economic Growth: 92% of new Arizona jobs come from Phoenix, driving the growth in the Phoenix data center market.
- Power Cost: Critical factor in both provider and user decisions, with Phoenix offering lower costs compared to heavily occupied markets like Northern California and Los Angeles.
Major Providers
- NTT Global Data Centers Americas
- Aligned Data Centers
- Compass Datacenters
- CyrusOne
- DataBank (zColo)
- Digital Realty
- EdgeConneX
- EdgeCore
- Flexential
- H5 Data Centers
- INAP
- Iron Mountain Data Centers
- PhoenixNAP
- QTS Data Centers
- STACK Infrastructure
- Stream Data Centers
These providers are expanding their presence in the Phoenix market, driven by the region's favorable conditions and growing demand.
