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    Top U.S. Data Center Markets

    The top US data center markets have experienced tremendous growth over the last couple of years due to increasing demand from financial services, healthcare, social media and other types of technology businesses. Wholesale and retail colocation space in continue to see a tightening supply which has increased rental rates significantly. Data center providers continue to reported lower vacancy rates in their facilities despite adding capacity through expansion. Higher demand can be contributed to several factors including security which is one of the major concerns prompting more companies to seek third party providers. Lower latency, increased availability and redundancy were also very important considerations for decision makers.
    Seattle, Washington

    Seattle, Washington

    Seattle is largely considered a top US data center market for several reasons. This market provides data center companies with good connectivity, relatively inexpensive power and a good climate for cooling. Seattle serves as a major gateway to the APAC region and it benefits from demand from APAC multinational enterprises that want to establish a presence in the US. Pricing in the Seattle market is relatively inexpensive due to considerable pricing pressures from an increasingly competitive market and an excess supply of data center space.

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    Silicon Valley, California

    Silicon Valley, California

    Silicon Valley encompasses all of the Santa Clara Valley including the southern half of the Peninsula and southern portions of the East Bay in Northern California. It’s home to many of the world’s largest tech companies as well as thousands of startups. Supply of available data center space in the Silicon Valley is nearing or at all time lows due to increased demand and a tight real estate market. Cloud infrastructure (IaaS) and enterprise software (SaaS) companies are driving demand in this market. For this reason, Silicon Valley is amongst the most expensive for both space and power. It is also susceptible to large earthquakes due to fault lines.

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    Minneapolis, Minnesota

    Minneapolis, Minnesota

    Minnesota was recently named the nation’s fastest growing tech market. The demand for data center space in the Twin Cities has increased significantly – as much as three fold. As a result, six new data center providers entered the Minnesota market with new development or expansion plans causing the area to become overbuilt. The abundance of vacant space (337,000 square feet) has led to pricing pressures for providers in the area. This makes Minnesota very attractive for customers looking for presence in the Midwest. It’s another option worth considering outside Chicago.

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    Chicago, Illinois

    Chicago, Illinois

    Chicago’s central location has always made it a hub for manufacturing and now technology. This top US data center market boasts large power grids and large buildings with solid concrete foundations. It’s home to 30 of the Fortune 500 and actually ranks as the fifth-largest data center marketplace in North America, with an estimated 1.96 million square feet in use. Demand comes from large enterprise users, the financial services vertical and Internet services providers (ISPs) looking for a local presence. Chicago is the third-largest Internet eyeball market in the US, the #1 peering market from a network connectivity perspective. It also has low-carbon power thanks to the Midwest’s nuclear supply.

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    Atlanta, Georgia

    Atlanta, Georgia

    Atlanta is considered the major interconnection point on the Eastern seaboard between New York and Miami and on to South America. Atlanta has a large network infrastructure and metro Atlanta ranks in the top five U.S. markets for total bandwidth and fiber access. In fact, two of the country's largest fiber routes (North/South and East/West) cross in metro Atlanta. Atlanta market is largely driven by its numerous Fortune 500 employers, technology companies and Internet providers. The Southeast's largest concentration of telecommunications companies sits at the heart of Downtown Atlanta.

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    Dallas, Texas

    Dallas, Texas

    The Dallas/Fort Worth data center market the fourth largest data center market in the US and attractive due to its access to a large infrastructure of telecommunication fiber networks and electric power grids. Business tax breaks and relatively inexpensive power make Texas attract market to build data centers in. As a result, North Texas one of the fastest-growing data center markets in the country. With hundreds of new businesses moving to the area and the greatest population growth in the nation, Texas is attracting billions of dollars of investment in data centers. The Dallas market is home to financial, energy and technology companies.

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    Phoenix, Arizona

    Phoenix, Arizona

    Phoenix is one of the largest cities in the US and its economic and political environment makes it a world-class hub for manufacturing, technology and financial services institutions. The Phoenix data center market is one of the most active leasing market and the second largest multi-tenant data center market in the US. The Phoenix market moderate electricity costs, lower build costs due to being a non-union construction state and significantly lower tax burdens. This is good for data center owners and operators. For colocation customers, Phoenix offers a real-time, ready-to-go inventory of data center space. Companies select Phoenix as an alternative to many of the higher priced data center markets in California.

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    Newark, New Jersey

    Newark, New Jersey

    New Jersey has long been considered a top data center market. This is due largely to the number of health care, financial and enterprise customers with headquarters or primary U.S. offices in Northern New Jersey, as well as customers who need proximity to New York for their network and IT deployments but are looking to minimize risk and costs. Availability of data center space in New Jersey is constrained due to demand and the limited construction of new builds or expansion of existing data centers.

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    Austin, Texas

    Austin, Texas

    Austin is quickly becoming a centralized hub for technology and the data center market has taken notice. Several key players in the data center industry have operations here, whether headquarters, R&D, manufacturing or mission critical enterprise data centers of their own. AMD, IBM, Cisco, Citigroup, Dell, Hewlett-Packard, Home Depot, Intel, and Oracle now have a presence in Austin. This is due in part to the geographic region which is located in the central time zone with a low risk for natural disasters. Austin also has a robust telecommunications infrastructure and power grid with a focus on green energy production.

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