Investor Primer: U.S. Data Center Market
Institutional investors are increasingly considering investing in a dynamic new property sector – data centers. Whether viewed as a subset of their industrial or office property allocations, or as new specialty property type, data centers investments can offer an attractive way to participate in the rapid growth of technology.
This article starts with an overview of the market for data center space in the major metropolitan areas of the United States and Canada. We next examine supply and demand trends for data center space, and the industries and users that are driving demand. Capital market conditions are then discussed, and we conclude with our thoughts on functional obsolescence and other risks posed by investing in this asset type.