Data center leasing hot in metro Atlanta so far in 2017

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Data center leasing hot in metro Atlanta so far in 2017

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A rendering of a Switch data center. SPECIAL

Leasing of space inside data centers — the massive compounds of servers used to power the Internet and hold everything from your Instagram photos to corporate secrets — surged in metro Atlanta during the first half of the year, a report released Monday by real estate services giant JLL found.

In general, the explosion of data usage — from streaming video, the Internet of Things and electronic purchases — means more data center space is needed to handle the gobs of traffic. More companies, meanwhile, have found it more efficient to move from owning and operating their own server farms to leasing space in centers owned by third parties.

The metro Atlanta area saw net absorption of data center space double in the first half of 2017 compared to the same period last year, JLL found.

With data centers, instead of square feet, think megawatts of power. Atlanta saw 8 megawatts of absorption compared to 4 megawatts a year ago, the JLL report found.

Metro Atlanta enjoys a strong fiber optic cable backbone, cheap power rates and a location that’s less prone to natural disasters such as earthquakes and damage from hurricanes. That will likely make the Atlanta area more attractive to data center developers and operators going forward, JLL Managing Director Wendy McArthur said.

“We’re a good location for critical operations,” she said.

Much of the new development will occur in the suburbs, McArthur said, though some operators that need to be downtown will continue to expand there, she said.

Atlanta has long housed data centers owned and operated by big companies, but the usage in the Atlanta region is shifting to third-parties like it is in other parts of the country.

“Atlanta has historically been an underserved market, but operators and users are turning their sights toward the city to anchor their presence in the Southeast, and will continue to break into the marketplace through acquisition and new builds,” the report said.

“There are a number of co-location players in the country who for a long time skipped Atlanta, and that is changing,” JLL Managing Director Leigh Martin said.

In North America, JLL found new data center development surged 43 percent in the first six months of 2017 compared to the same period a year ago. Leasing, which had been off to a torrid pace from January to June last year, slowed so far this year.

Net absorption was 182.1 megawatts in the first half of this year, compared to 249.1 megawatts in the same period a year ago, which JLL described as a record.

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