Intelligent Investment


North America Data Center Trends H1 2023

September 6, 2023 4 Minute Read


Colocation Insights

  • An existing tenant in Centeris Data Center in South Hill expanded their leasing space by 2 MW.
  • Sabey leased 1.7 MW at Building 4 in SDC Seattle.
  • Operators are seeing increased leasing activity from all sectors including AI, hyperscale, enterprise, satellite, SaaS, 5G and edge users.

Market Trends

  • The volume of data traveling over carrier hotels and multi-model data center networks has exponentially increased, resulting in the need for more data access points. As a result, 100- to 400-gigabit circuit sizes are common. Frontline providers such as Digital Realty’s globally connected Westin Building are now even using 800 gigabit circuits. Five to 10 years ago, 100 megabit to 10 gigabit circuit sizes were normal.
  • New, state-of-the-art glass fiber is being added to Seattle’s urban, long-haul terrestrial and connecting undersea routes. The goal is to further enhance the region’s global connectivity and reduce latency.

Notable Activity

  • Washington State expanded its Sales and Use Tax Exemption program to cover owners and tenants of qualifying data centers of at least 100,000 sq. ft. in the King (Seattle), Snohomish (Everett), and Pierce (Tacoma) urban counties. This tax exemption runs until 2038. It applies to all data center, server and power build costs, equipment purchases, installations and updates.

Figure 1: Historical Market Information

Source: CBRE Research, CBRE Data Center Solutions, H1 2023.

Figure 2: Historical Supply and Demand

Source: CBRE Research, CBRE Data Center Solutions, H1 2023.

Figure 3: % of Total Secondary Market Inventory

Source: CBRE Research, CBRE Data Center Solutions, H1 2023.

Figure 4: Market Fuel Mix

Source: Seattle City Lights.

Figure 5: Average Asking Rates

Source: CBRE Research, CBRE Data Center Solutions, H1 2023.

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