Atlanta is in Expansion Mode: CBRE’s Mike Lash Gives Snapshot of the Activity on the Ground in Peach City
ATLANTA, GA – CAPRE’s Fourth Annual Greater Atlanta Data Center & Cloud Infrastructure Summit kicked off with a keynote presentation titled “State of the Greater Atlanta Data Center Market,” by Mike Lash, Senior Associate at CBRE Data Center Solutions, a firm which manages 80 Million square feet of raised floor space within enterprise, colocation and hyperscale data centers.
In this keynote, Lash offered a lay of the land of the data center industry, both nationally and locally to Atlanta to illustrate that data centers aren‘t going anywhere, but who owns them and how they’re being constructed is changing. After some remarks about the national data center industry as well as the market forces that are driving more demand to Atlanta, Lash honed in on the latest data center activity in the region. And according to Lash, one thing is clear – Atlanta is in expansion mode.
“We currently have quite a bit of data centers being built. We’re at a million square feet in Atlanta,” he began. “The raised floor under construction today, at the end of 2019, [will be] 70,000 square feet. That’s about 21 megawatts of wholesale. And if you combine both of those together, you’re looking at around 34 megawatts of new product coming on the market by the end of this year.”
To be clear, some of that has already come onto the market, but no matter how you slice it, that’s a pretty healthy click. “And if you count what’s planned, [such as] the land that’s been bought and held onto, with the expectation that it will be built in the next couple of years, the industry will triple in Atlanta,” he predicted. “It’s an incredible, incredible time to be in a primary market, in a city that was known as the terminus, where things ended for all transit.”
The genesis of this growth is multi-faceted, stressed Lash. “We have fiber in here, we have major hubs here for gaming, major hubs for credit card processing, and it’s just amazing the niche that Atlanta has carved out for itself,” he explained.
“Another thing to note is that we have a very low vacancy rate, as far as most of the primary markets. If you look at Dallas, or if you look at Northern Virginia, their vacancy rate is very high, to put it nicely — with Atlanta, we have a 13% vacancy rate,” Lash shared. “That just means that what is move-in ready today is very low. It’s a very competitive market. And if you look at our pricing, it’s kept our pricing pretty consistent. You’re not seeing as aggressive of pricing in Atlanta as you would be seeing in some of the other markets that have [similar] inventory.”
Next, Lash provided a quick snapshot of the downtown Atlanta data center market. “This isn’t comprehensive but it’s a quick tour,” he prefaced, before diving right in. “DataBank just built the CODA Data Center, [which is] some new product in Midtown, H5 recently built out some new space at 345 Portland. Equinix at 180 Peachtree Street has some space as well, and American Tower, which we’ll hear from later today and which just purchased Colo ATL, has space over at 55 Marietta, taking advantage of the proximity to the Carrier Hotel of Atlanta, which is 56 Marietta, and which Digital Realty owns downtown. Equinix has two sites on the southwest side of town – [one of which is] a newer site doing quite well.”
“INAP and Digital Realty are in the 250 Williams Building, a million square foot, four-plate building, similar to the Infomart,” he continued. “They’ve had tremendous success within that building. QTS has recently purchased land and plan on building in the metro area as well.”
Next, Lash zoomed out to take a look at the greater Atlanta metropolitan area. “Looking at the suburban markets, which typically have larger footprints, let’s start with ASCENT, STACK and Flexential,” he transitioned. “They all have numerous space up in the Alpharetta region, which is great because of the power diversity that is up there. QTS is doing a small expansion up in their Swanee location, Flexential is still staying strong in Norcross, and INAP has just recently turned the old Coca Cola data center and perimeter into a multi-tenant data center, and they will actually have both wholesale and retail options available in that spot.”
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