The Atlanta Region Serves as an Excellent Top 10 Data Center Market and Should Expect Further Growth
by Michael Rareshide, on Nov 27, 2017 4:40:51 PM
The Atlanta region — home to 17 Fortune 500 corporations and over 13,000 high tech companies — has one of the nation’s most robust data center markets. In this blog post, we’ll talk about why Atlanta was a logical choice for data centers in 2017 and why this metro region will continue to rank high as a site for data center expansion in the future. Atlanta can check off the boxes for data center site selection in just about every category:
- The region is relatively low risk for natural disasters.
- Power costs are competitive within the U.S. and accessible.
- Land sites with infrastructure in place are reasonably available.
- Economic incentives are an option.
- The fiber network is as dense as any Tier 1 market.
Atlanta’s data center and colocation market in 2016 enjoyed its biggest year ever in terms of total megawatts (MWs) of wholesale data center absorption which exceeded 12 MWs. While not quantified, several resources are reporting that 2017 should exceed that demand.
A history of the Atlanta data center market since the 1990s
During the Internet Boom of the 1990s, Atlanta’s growth was concentrated in the downtown core in such carrier hotel and colocation facilities as 55 Marietta, 56 Marietta and 180 Peachtree. Other highly connected facilities were 250 Williams and 345 Courtland. Not including enterprise data centers for corporations like Home Depot, UPS and Delta Airlines, the largest suburban colocation projects by 2001 were Exodus Communications’ 300,000-square-foot Internet Gateway site and ITC DeltaCom’s 375,000 SF Suwanee data center. When the dot-com bubble burst, these companies filed for bankruptcy protection and their facilities were gobbled up by other providers. Other smaller colocation providers remained near the downtown core.
The suburban Atlanta retail and wholesale colocation market remained fairly small and static until 2005 when Quality Group and its QTS Data Centers bought the ITC DeltaCom site and Digital Realty purchased the Exodus data center. Atlanta has now drawn major new development and expansions from several data center developers and wholesale colocation operators.
The competitive landscape and some further market statistics
As Atlanta continues its year-over-year record absorption, the competition is comprised of several heavyweights in the retail and wholesale colocation sectors. Here’s a list of some of the notable data center projects:
- QTS Data Centers: Long the dominant player in the Atlanta wholesale colocation sector, QTS has two massive colocation campuses. The above-mentioned Suwanee Campus totals 376,000 SF and 36 megawatts. The QTS “Metro” Campus exceeds 970,000 SF with over 120 MVA of power with its on-site substation, making the Metro Campus one of the largest data centers in the world.
- Switch: The company announced in mid-2017 that it was entering the Atlanta market for its latest $2.5 billion Prime Data Center Campus. To be called “The Keep,” the campus will total several million SF of raised floor space in a Tier IV design, marketed as a hub and excellent solution for those customers considering Ashburn, Virginia; Miami and the Southeastern United States.
- Digital Realty: Not including two 100% net-leased data centers, Digital operates two carrier hotels and one multitenant powered shell data center building that, in total, exceed 40 MWs and 460,000 SF.
- T5@Atlanta: This developer’s Alpharetta Campus can accommodate 55,000 SF of turnkey raised floor data center and 6 megawatts in its first phase.
- Google: The Internet firm has over 2 million SF of data centers concentrated in Lithia Springs with another $300 million expansion under way.
- Equinix: With its recent acquisition of two Verizon Business facilities, Equinix has five IBX data centers totaling nearly 250,000 SF, including its downtown site at 180 Peachtree.
- Lincoln Rackhouse: This company entered the suburban wholesale colocation market in 2017 with the sale-leaseback purchase of the Coca-Cola data center.
- H5 Data Centers: This company owns and operates the highly connected 110,000 SF 345 Courtland building, which includes turnkey data center space.
- DataBank: This firm is developing a 94,000-square-foot data center with Georgia Tech as its anchor.
Depending upon which statistics are being used, Atlanta currently stands as the No. 8 or 9 data center market, but it is very reasonable to expect over the next two or three years that it will overtake some other markets higher on this list. With all of the favorable factors on the data center site selection checklists, the Atlanta market should expect to continue its upward growth curve.