D-FW data center construction slows with ample supply

Dallas-Fort Worth data center construction has slowed this year, as the industry lets demand catch up with recent increases in supply. In the first half of 2020, only 156,200 square feet of new data center projects were being built in North Texas, according to a new report by JLL. Another […]

Dallas-Fort Worth data center construction has slowed this year, as the industry lets demand catch up with recent increases in supply.

In the first half of 2020, only 156,200 square feet of new data center projects were being built in North Texas, according to a new report by JLL.

Another 1.4 million square feet of data centers are planned in the area.

North Texas ranks seventh nationally in square footage of data centers under construction. D-FW ranks fifth in new capacity on the way, with 31 megawatts of data centers in the works.

Northern Virginia, with 3.9 million square feet of building, and Northern California, with 1.4 million square feet, lead the country in new data center building.

D-FW construction has slowed because of several years of recent construction.

“Supply in Dallas-Fort Worth continues to increase, but at a much slower pace than in recent years,” JLL analysts say in their latest report. “Pricing in D-FW continues to drop, as several operators have lowered their asking rents significantly in the last year.

“Ample supply and lower pricing will attract more enterprise users to evaluate the D-FW market,” the report concludes. “Lower growth in supply may help stabilize rates at existing levels.”

Data centers nationwide have outperformed most other real estate products.

As of midyear, data center properties have overall returns of 19.2%, compared with 2.3% for industrial buildings and losses for all other property sectors, JLL found.

“While data centers’ resiliency, reliability and manned operations have been tested during the pandemic, it is one of the few sectors that performed strongly in the first half of 2020,” the analysts say.

D-FW ranks seventh nationally for new data center projects.
D-FW ranks seventh nationally for new data center projects.(JLL )
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