Top 5 Data Center Trends to Watch in 2017 and New Jersey Outlook

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Throughout 2017, user demand for smart data center solutions is expected to heat up. Here are the top five data center trends we expect to see:

  1. Bold M&A will disrupt the playing field, while raising barriers to entry for newcomers to join the game.
  2. Shifting global policy and economic trends will spark important new questions about sovereignty and taxation.
  3. Data still needs a home, but cloud adoption is shifting which data centers host it and where.
  4. Retail pricing may be on the way out in 2017 and beyond, as wholesale pricing becomes ubiquitous.
  5. Investors will continue to clamor for data center REITs for good reason.

New Jersey

2016 Happenings:

  • Merger and acquisition activity was key in the market, with deals such as Telx/DLR, Cologix/NetAccess and QTS’s purchase of DuPont Fabros Technology’s data center campus.
  • Financial services led the way in colocation leasing activity, with healthcare and life sciences quietly filling in some of the vacancy gaps.
  • Many of the large enterprise data centers strongly considered the question of owning compared to leasing.

2017 Expectations:

  • Construction of additional speculative space may be on the horizon. Turnkey inventory has been whittled down considerably through 2016, and margins could tighten after a few prospective deals come to fruition.
  • New national and global providers will enter the market due to the proximity to New York City and the financial markets.
  • The state’s gubernatorial election could inspire legislators to revisit incentives packages for attracting and retaining corporate tenants, which could potentially include more coverage for data center users.

Download JLL’s complete 2017 Data Center Outlook Report.

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