Vantage: We’ve Nearly Filled Our New Santa Clara Data Center

Jan. 25, 2018
In a sign of pent-up demand in Silicon Valley, Vantage Data Centers has leased 90 percent of the 9 megawatts of space at its V6 facility in Santa Clara, which opened in October.

Data center leasing is bouncing back in Silicon Valley. After an extended period of limited data center supply, new construction is bringing more space online in Santa Clara, and customers are quickly gobbling it up.

Vantage Data Centers said today that it has leased 90 percent of the 9 megawatts of available space at its V6 facility in Santa Clara, which opened its doors in October. The company has signed three different deals to take up most of the space in the new building.

“We continue to see strong demand for wholesale services in Silicon Valley, and our ability to lease V6 data center capacity so quickly is a testament both to our services as well as strong customer demand,” said Vantage President and CEO Sureel Choksi. “As soon as we build something, we’re leasing it.”

Choski said the leasing at V6 reflects pent-up demand in Santa Clara, has long been the Data Center Capital of Silicon Valley due to competitive power pricing from the municipal utility, Silicon Valley Power. That’s why there’s 35 data centers are located in a three-and-a-half square mile area within Santa Clara.

A Shortage Born of Boffo Leasing

The current shortage of wholesale data center space resulted from a surge in leasing in 2015 and early2016, when large cloud deals filled the remaining space more rapidly than many service providers had anticipated.

In 2015 and the first quarter of 2016 there were nine leases of wholesale data center space in Santa Clara that exceeded 2 megawatts, totaling more than 40 megawatts of deals, according to data from North American Data Centers. Between April 2016 and the end of 2017, there were just three new wholesale leases announced of 2 MWs or more in Santa Clara, totaling about 7.5 MWs of space.

“There are land constraints in Santa Clara, and it takes more time to build a data center here than it does in Ashburn (Virginia) or Dallas,” said Choksi. “We had an extraordinarily supply-constrained market in late 2016 and 2017, because we all saw stronger demand than we expected in 2014, 2015 and 2016. What we expect is that this 18-month period of acute supply constraints will be remediated this year.”

The first wave of new supply is V6, a two-story building on Vantage’s Santa Clara campus with 9 megawatts of capacity. The V6 design features a slab design rather than raised floor, offering choice for Vantage’s customers.

“We designed this data center with the intent of supporting higher density racks and heavier weights,” said Choksi. “One of our customers in V6 is bringing water directly to the rack and will be supporting densities of more than 30kW per rack. We have the ability to tailor our offering to support this higher density.”

An illustration of the Vantage V6 data center. (Image: Vantage Data Centers)

There’s more space in the pipeline, and likely more leasing to follow. Later this quarter, Digital Realty is expected to bring 6 megawatts of capacity online at its new data center on Alfred Street in Santa Clara, and in June Vantage expects to open the final building on its campus off Walsh Avenue, known as V5, which will add another 15 megawatts.

Meanwhile, CoreSite has space remaining in its SV7 facility in Santa Clara, and has begun work on a new data center on adjacent property that could support as much as 18 MWs of capacity when it is completed, most likely in 2019.

The next phase of growth for the Silicon Valley market is focused on a 9-acre site on Mathew Street in Santa Clara, where Vantage plans a major new cloud campus, which will be home to four data centers offering 69 megawatts of critical IT load. The site is adjacent to large data centers operated by Digital Realty Trust and DuPont Fabros.

“In Silicon Valley, demand remains strong and supply is constrained,” said Choksi. “We’re going pedal-to-the-medal in building V6 and now V5. We are a few short months away from breaking ground at Mathew, with delivery expected in 2019.”

Looking East

Vantage recently announced plans to invest $1 billion in a new campus in Ashburn, which is the largest and busiest data center market in the world. Vantage plans to build 108 megawatts of data centers on a 42-acre property, making it one of four new players in the Northern Virginia market this year.

To lead its leasing effort in Ashburn, Vantage recently hired industry veteran Lee Kestler as Chief Commercial Officer. Kestler spent eight years as a Senior Vice President at DuPont Fabros Technology, which has built and leased nine data centers in Ashburn. Prior to DuPont Fabros, Kestler held multiple sales and sales management roles at Savvis.

“Lee is based in Ashburn, knows the market well and is very well connected,” said Choksi. “That’s a big deal, and we’re really excited about having Lee join Vantage.”

About the Author

Rich Miller

I write about the places where the Internet lives, telling the story of data centers and the people who build them. I founded Data Center Knowledge, the data center industry's leading news site. Now I'm exploring the future of cloud computing at Data Center Frontier.

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