Demand for data centers remains high across the country. Minneapolis is no exception, as a new report from CBRE points out.
According to CBRE’s U.S. Data Center Trends Report, the Minneapolis data center market saw 3.6 megawatts of net absorption in 2019. That’s a strong year, with the absorption level increasing by an impressive 3.3 megawatts when compared to 2018.
Because demand for data center space in the Twin Cities is so high, it’s little surprise that developers are reacting. CBRE said that the market’s data center inventory grew by 1.5 megawatts in 2019 on a year-over-year basis to 51.1 megawatts.
Even with this new supply, the market’s vacancy rate dropped 510 basis points during the year to 30.1 percent. CBRE reports that Minneapolis was the 12th busiest market for data center leasing in the United States lastyear.
“Many enterprise users are migrating to colocation facilities that offer dynamic cloud ecosystems and on-ramps, which was a major driver in our large year-over-year increase in net absorption,” said Dan Peterson, vice president for data center solutions with CBRE. “We are also seeing providers react to consumer demands by providing lower power rates to remain competitive and attract new clients, most of which are coming from outside the local market.”
Minneapolis’ strong showing in the data center market is not surprising. The demand for data center space is surging across the United States.
According to CBRE, U.S. data center leasing and construction completions both reached record highs in 2019. The company reported that the seven top data center markets in the country saw 396.4 megawatts of net absorption in 2019. That’s a jump of 33 percent when compared to 2018’s then-record level.
Northern Virginia, the largest data center market in the world, accounted for 64 percent of net absorption in these primary markets, CBRE said.
“While many enterprises are outsourcing a growing percentage of their IT requirements to cloud providers, demand for colocation and on-premise space remains strong,” said Pat Lynch, senior managing director for data center solutions with CBRE. “This reflects the increasing popularity of hybrid IT strategies, which empower users to capitalize on the flexibility and connectivity offered by cloud providers while maintaining control over applications and testing environments.”