Industrial N Illinois

Chicago’s data center market will continue to cruise in 2018

Chicago’s data center market will continue to cruise in 2018,ph1

The global data center market went out strong at the end of 2017, and looks as if it will continue to surge for the foreseeable future. JLL’s 2018 Data Center Outlook reveals that even after a record-shattering 2016, robust data center leasing activity continues across all major North American markets, taking around 25 percent of available data center space in many major cities.

Overall, North American markets account for over 60 percent of the near-400 megawatts (MW) currently under construction globally. At 34 MW, Chicago is one of the top markets leading the pack, just behind Las Vegas/Reno (40 MW) and Toronto (39 MW).

“2017 was a banner year for the industry with hyperscale cloud users heavily investing in the Midwest,” said Andy Cvengros, vice president, JLL. “We expect that same momentum to carry into 2018 with cloud, enterprise and technology continuing to be driving forces.”

Last year, enterprise leasing was at its highest point in the past five years. As a result, Chicago’s supply has become increasingly tight across the downtown and suburban markets. Leasing deal counts nearly doubled with the demand by cloud, healthcare, financial and expanding managed service providers.

“We find ourselves in one of the most connected markets in the middle of the country, and because of it demand is high and everyone is trying to find the best data center site to quickly reach their customers,” said Sean Reynolds, managing director, JLL. “The infrastructure and fiber optics that are available here in Chicago are what make this area a very competitive data center market.”

The JLL research highlighted hot topics in the industry as reported by top data center users and what to watch for in Chicago in 2018. Specifically, cloud, enterprise and technology will continue to be driving forces while high demand will necessitate increased inventory to fill gaps of availability. And while low power rates continue to provide attractive options, some cloud providers may be tempered by Illinois’ tax climate.