December 3-December 16, 2014 —
COLORADO REAL ESTATE JOURNAL
— Page 7AA
UNRIVALED
TALENT.
UNMATCHED
RESULTS.
With a passion for everything that makes our state so
special, our firm is the unrivaled leader in commercial
real estate services in Colorado. Strategic, forward-
thinking and results-driven, our 464 professionals are
committed to delivering the best to our clients and the
community we serve.
For more information on how CBRE can assist you with your
commercial real estate needs in Colorado, please contact:
Ray Pittman, Jr.
Senior Managing Director
+ 1 720 528 6357
Tim Swan
Investor Services
+ 1 303 628 1766
Kate Waggoner
Occupier Services
+ 1 720 528 6461
C
isco recently released
its 2015 projections,
which included the
following:
• Data center traffic to nearly
triple on the back of cloud
growth in the next five years to
8.6 zettabytes annually by 2018.
• Traffic will grow with a
compound annual growth rate
(CAGR) of 23 percent, the
report forecasted. This traffic is
equivalent to streaming all the
movies (around half a million)
and TV shows (3 million) ever
made 250,000 times.
A recent report by
International Data Corporation
predicts public cloud revenue
to reach more than $127
billion in the same time frame.
Cisco’s annual overall traffic
growth is in the same ballpark
as IDC’s annual cloud growth
rate at 23 percent.
This is compelling
information that clearly
indicates a growing need for
high-quality, well-connected
data center infrastructure.
The Rocky Mountain
region continues to see
the results of this growing
demand with projects like
Microsoft and Green House
Data in Cheyenne, Viawest,
TDS Telecom (OneNeck),
Edgeconnex and Time Warner
in Denver as recent examples
of data center growth in this
market.
n
What is driving this data
center demand and how does
this region compete?
Data
creation, as mentioned in the
statistics referenced at the
start of this piece, continues
to grow rapidly. It is predicted
that by 2015 there will be 15
billion devices connected
to the Internet. The Denver
area offers many competitive
advantages including:
competitive power cost,
excellent fiber infrastructure,
ideal climate, low risk of
disasters and an improving
incentive scenario for data
center user and occupiers.
In a recent report published
by CBRE’s Global Research
and Consulting, both Denver
and Colorado Springs ranked
below average among 23 top
markets for data center cost on
a leased basis with Colorado
Springs emerging as one of the
most attractive U.S. markets on
a cost basis due to low rental
rates and the cost of power.
n
What are the risks and
opportunities for this region as
it pertains to future data center
demand?
In Denver and the
Rocky Mountain region, we are
fortunate to have a number of
new projects in this area, with
respected, high-quality product
from national and global
providers in the marketplace.
Viawest’s new data center is
an example of the type of
high-quality, cost-competitive
data center product that this
region needs to retain existing
demand as well as attract new
demand from outside of the
Rocky Mountain region. We
expect to see additional builds
in 2015 from TDS Telecom
and from Edgeconnex
that will add to the quality
offerings in this area. While
the economics remain very
positive for Colorado Springs,
we are seeing less activity in
this area than prior years.
We believe this could be due
to the general acceptance of
third-party owned data centers
where corporate clients lease
space on an “as needed” basis.
This is a trend we are seeing
across the country and the
globe. Historically Colorado
Springs has been a highly
attractive market to corporate
built and owned data centers
and this part of the state
may need to reevaluate their
approach to continue the
momentum they have had
in prior years for data center
projects.
Lastly, and as referenced in
the recent CBRE 2015 Forecast
event, we see an opportunity
in downtown Denver for a
possible new carrier hotel
facility. This would compete
with existing assets in
downtown Denver that serve
as critical interconnection
points for Internet and
communication traffic coming
to and from the region and
heading to all parts of the
globe. The growing demand
for this space and the lack of
available space in the existing
assets could warrant an
excellent business opportunity
for companies focused on
this highly technical and very
expensive space.
CBRE’s Data Center
Solutions team has seen
fivefold growth in our business
serving this unique and very
technical industry and need.
We are finding our clients
embracing the consulting and
strategic support we offer to
our IT and C-level clients as a
tremendous value-add resource
as they evaluate the numerous
and very complicated decision
criteria associated with their
current and future data center
strategies.
Pat Lynch
Managing Director | National
Practice Group, CBRE
