Financial services drive growth in data center rentals in New York City – Commercial Observer
The financial services sector could have been overtaken by technology as the primary driver of rental business in New York City, but it still dominates the data center business, a new report from CBRE find.
New York’s tri-state area saw 6 megawatts – a power unit used to measure data center size instead of square footage – of the net absorption of data center space in the first half of 2021, 3 megawatts more than the 2020 total, according to the report. Financial services have been the main driver of this business, although CBRE could not say how much it rented in the first half of the year.
Due to strong rental activity, the data center vacancy rate fell to 12.1% in the first half of 2021, CBRE found.
But the tri-state region is expected to see an increase in new data center construction, with 38.1 megawatts to be added to the total area of 160.6 megawatts, according to the report.
“The price of data center power per kilowatt has remained stable in the tri-state region, primarily due to historic construction cost compression and entrenched construction efficiency.” Jon meisel, data center broker for CBRE, said in a statement. “However, the market should watch closely if a new supply will affect prices in the future.”
And while the region is expected to see a big increase in data center space, it still only accounts for around 5% of the country’s total market inventory, according to CBRE.
Northern Virginia remained the world’s largest data center market, at 1.5 billion megawatts, but net absorption has fallen year on year, according to the report.
Nicholas Rizzi can be reached at [email protected].