Southern California data center activity totaled 5.2 megawatts (MWs) in the first half of 2018, bringing the market total to 104.4 MWs. This total includes 16 MWs of inventory that has been added to the market since 2017. In general, data center activity is up across the country, with 177 MWs of total activity in the first half of the year, and it is set to break 2017 activity records. Demand from technology, entertainment and healthcare companies in the Southern California region is particularly strong.
CBRE First Vice President Kristina Metzger told GlobeSt.com, "There will always be a need for data center capacity in the Southern California market given the sheer size of the population, diverse economy and connectivity to the Asia Pacific Region." However, competition from other states has had an impact on demand. There are fewer large requirements in Southern California than other regions of the country, which benefit from lower power costs and taxes. "As such, the competition for large, one-off new acquisitions has risen and local operators have become increasingly competitive in their offerings. As several providers have some MWs of capacity available, we anticipate this trend to continue," observed Metzger.