Data Centers: Growing By The Gig

As more companies put their business activities on the cloud, data centers with the potential for scalability and proximity to cloud “on ramps” are better poised to compete, according to CBRE’s latest report.

By the BF Staff
From the January/February 2021 Issue

With more than 373 megawatts of new data center capacity under construction, CBRE is forecasting that total data center inventory will grow by 13.8 percent in 2021.

data centersCBRE’s forecasts come from its 2021 Market Outlook, which covers the real estate market and market factors, including the impact of the pandemic and the increasing use of renewable energy. [Editor’s note: data center capacity is measured in net absorption of megawatts.]

According to CRBE’s 2021 Market Outlook: “The U.S. wholesale data center market continues to benefit from the critical role that data centers play in supporting business operations. Continued adoption of hybrid information technology (IT) and cloud services, the growth of artificial intelligence (AI) technologies and an ability to support a dispersed workforce will drive industry growth over the next several years.”

According to CBRE, data center growth was most robust in Northern Virginia— which for several years has been the nation’s largest data center hub—and the Dallas/Ft Worth, Chicago, Silicon Valley, Phoenix, New York and Atlanta markets. However, CBRE says it expects the data center market to begin leveling out in 2021 as demand starts to plateau. With 1.3GW of capacity, Northern Virginia is by far the largest data hub.

As more and more companies begin to adopt a cloud or hybrid-cloud approach, the growth potential dims smaller providers. According to CBRE, facilities with “potential for scalability, high connectivity and proximity to cloud on-ramps” are better positioned, “than older, smaller assets with less ability to support the evolution of data center technology.”

WAYNESBORO, VA: PRIMED FOR BUSINESS

Virginia boasts the largest data center market in the U.S. and Waynesboro is well positioned as an emerging location for tomorrow’s data center market.

Recorded by USA Today as “one of the best places to live,” the city combines its natural beauty with competitive power, exceptional broadband infrastructure, low risk viable sites and interstate accessibility. Uniquely positioned in the iconic Shenandoah Valley of Virginia, Waynesboro’s rural but easily accessible location is primed for business opportunities.

data centers
Connect with nature—only minutes from downtown. (Photo: City of Waynesboro)

The convenient location along I-64 in the Valley’s I-81 corridor boasts an exceptional highway system that provides easy access to major markets with efficient commuting for employees and remote workers with Washington, DC 2.5 hours to the north and Richmond 1.5 hours to the east. The Shenandoah Valley Regional Airport (SHD) offers convenient access to United’s global network through two major hubs: Washington-Dulles and Chicago O’Hare as well as general aviation services for corporate aircraft.

The region’s concentration of 39 colleges and universities within a 2.5-hour drive provides graduates in a wide variety of degrees and courses of study as well as collaborative workforce development solutions, including specialized training, apprenticeship, bootcamps and more.

In 2019, 4,300 students graduated from these 39 institutions with data science related degrees. Locally, James Madison University offers a wide range of technology related degrees in their College of Integrated Science and Engineering; Virginia Military Institute’s Computer and Information Sciences with a minor in Cyber Security; Bridgewater College’s degree in Computer Science; and Blue Ridge Community College’s Cyber Security program convey a strong message that the tech talent pipeline is robust. (Virginia was the top ranked state in the Cybersecurity Leaders category in BF’s 2020 State Rankings Report). Nearby, Virginia Tech, the University of Virginia, Virginia Commonwealth University and Liberty University all boast multiple data science related programs, and along with JMU, account for 82 percent of the technology graduates.

Additionally, the Commonwealth’s Tech Talent Investment Program is a $1.1 billion investment in computer science education that will transform Virginia’s tech talent pipeline for the next two decades.

Waynesboro is the only place on the planet where the Shenandoah National Park/Skyline Drive, Blue Ridge Parkway, Appalachian Trail, an urban trout fishery and two national forests can be accessed within minutes. The wide variety of outdoor recreational activities— including hiking, mountain biking, fly fishing, horseback riding and bicycling— combined with cultural gems such as historical venues, art galleries, globally recognized street art and a newly restored vaudeville era preforming arts center provide endless opportunities for adventure. Such attractions paired with the national brand restaurants and shopping, as well as unique local breweries and dining, give Waynesboro a vibrant quality of life.

Multiple telecommunications providers serve the area with reliable fiber infrastructure, diverse routes and connectivity to major internet connection points, including the four new transoceanic fiber cable connection points in Virginia Beach. Dominion Energy provides reliable and competitively priced power.

Although Waynesboro is in close proximity to major east coast locations, its cost of living and cost of doing business are less than the national average. The average weekly wage for IT related jobs is 52 percent less than the US average, the city has a cost-of-living index of 86.6 and land costs and lease rates are well below all major east coast cities.

With its location in the west central part of Virginia, Waynesboro is over 100 miles from the major data center concentrations of the Commonwealth and provides a low-risk option from natural and man-made disasters.

Waynesboro offers significant multiyear incentives for eligible projects located in one of the three Technology Zones, plus data centers may be eligible for Virginia’s retail sales and use tax exemption on qualifying equipment. Current legislation provides a state sales tax exemption for computer equipment provided the data center has a new capital investment of at least $150 million and creates at least 50 new jobs with average annual wage 1.5 times the locality average wage. This exemption expires June 30, 2035. Additional state and local incentives may also be available.

The city’s technology zones are strategically located to optimize the intersection of fiber, electricity and water offering a variety of downtown storefront, suburban office park and greenfield site locations. There are two greenfield locations located in the city. Both are located within the federal Opportunity Zone and one is located within the Commonwealth’s Enterprise Zone, which reduces the minimum new jobs requirement for sales tax exemption to 25.

Waynesboro is uniquely positioned for prime business opportunities with low risk/viable real estate to meet every need, aggressive incentives, competitive power and established broadband infrastructure.

The City of Waynesboro recognizes that the business of today requires prepared sites for new business investment. The City owns and is preparing 200 acres of greenfield land which will be “tier four” locations by 2023. These sites, with full infrastructure, will have the capacity for up to 1.4 million square feet of new industrial space, some with rail service available. They are located in the federal opportunity zone and the state enterprise zone for additional investment and grant opportunities. The sites are within one mile of I-64, which facilitates one-day truck delivery to Boston, Detroit, Nashville and Jacksonville.

Want to learn more about corporate expansion in the data center industry?

Searching for a location for your data center relocation or expansion project? Check out all the latest data center news related to economic development, corporate relocation, corporate expansion and site selection.