JLL’s Allen Tucker Touts Unbelievable Year to Kick off CapRE’s 2019 Data Center & Cloud Infrastructure Forecast East

New SquareDULLES, VA – As the 2018 Data Center Game came to a close, CapRE’s 2019 International Data Center Series kicked off with a bang – thanks to CapRE’s 2019 Data Center & Cloud Infrastructure Forecast East on January 31 in Dulles, VA. To set the tone, Allen Tucker, Managing Director of JLL, kicked off the summit with a keynote full of reflection & analysis: Allen Tucker’s Observations: Looking Back at 2018 and Looking into the Crystal Ball for 2019. And according to Tucker, you might be able to debate many aspects of the NoVa data center arena, but you can’t deny one simple fact – 2018 was huge.

“The big number is that 270 megawatts were executed in Northern Virginia in 2018. That’s the biggest year ever. The fifth consecutive biggest year ever. A massive year!” Tucker exclaimed, referring to the slide below used as a visual aid. “The bigger the numbers below this represent a four-year cumulative demand growth by market. So you’ll notice that half of the last four years were acquired in Northern Virginia alone. Half. So we’re talking about a half a gigawatt in four years, and a quarter of a gigawatt in one year alone.”

“The first question everyone is going to ask is, what does that represent as relative to just pure enterprise?” continued Tucker. “Because I’ve got a lot of people whose feelings are hurt, because they don’t get a lot of hyperscale in other markets. So if you still take that number out, we’re still about 60-70 megawatts of pure enterprise. That’s a pretty amazing thing. Right down the street, there is a building going up that is the biggest data center transaction ever. Just one building for 72 megawatts. That’s CloudHQ. Just think about it. It’s a little social media building and they’re already planning – get ready for this – 96 megawatts in a single building. That gives you an understanding of what the growth of this capacity is.”

According to Tucker, there are two takeaways from the above slide. While one is the important thing is to focus on the continued growth of this market for 5 consecutive years. Secondly, Phoenix is coming along just fine. “People say, how is Phoenix doing relative to the rest of the markets?” he recalled. “Well it’s the only one that has consistent, positive growth, just like Northern Virginia. But they’re at 51 megawatts this year. That was a great year, a historic year for them as well. The next big takeaway that no market has ever done greater than 60 megawatts. Northern Virginia has done that every year since 2014. It’s pretty historic.”

Next, Tucker looked at this same data — for the last six years — quarter by quarter, with the slide above. “The most important takeaway is that in the last year, in the fourth quarter, 18 megawatts were done in Northern Virginia,” he divulged. “That’s the best fourth quarter since 2015. And there was a great first half – it was a record. About 174 megawatts and we added about another roughly 100 megawatts in the second half as well. that’s pretty critical to understand.”

Above, Tucker dived into the market-share perspective. “How does it really break down?” he asked the room. “We’re talking by the providers, the industry type and also the deal type. So most of it is driven by Clouds and Social Media. Those are the real hyperscalers. The next question is who is doing the deals? Roughly you have almost 80% done by Digital Realty, Cloud HQ and CyrusOne. Those three right there. That’s not to say that others aren’t represented, just that they’re doing the majority of the deals.”

Finally, Tucker divulged what was, by his estimation, the most amazing thing — and hinted that he would dive into it more later. “Why does this market continue to grow, unlike any other market?” he posed. “Why do other providers come into this market? Because they just want a piece of that 270 megawatts. You can’t go into any other markets and get the kind of depth that you can get in Northern Virginia. That’s really important to understand. Next you have to look at the size of the deals. You’ve got 83% of the market share at over 6 megawatts. These were just massive deals.”


Allen Tucker (R) connects with Verizon Media’s Peter Vandaloo at CapRE’s 2019 Data Center & Cloud Infrastructure Forecast East

Stay tuned to future CapRE Insider Report for more from Tucker at CapRE’s 2019 Data Center & Cloud Infrastructure Forecast East. For more from Tucker, check out previous CapRE Insider Reports: