New Players Boost Activity in New Jersey Data Center Market

Nov. 9, 2017
The New York/New Jersey Data Center Market Report from Data Center Frontier explores how the Greater New York data center market is gaining traction and becoming more stable. This excerpt from the report gives a picture of supply and demand trends in the New Jersey data center market.

We continue our series of stories on the leading geographic markets for data center space. Data Center Frontier partnered with DatacenterHawk to provide in-depth market reports on each city we profile. Read on for a special excerpt from the new New York/New Jersey Data Center Market Report. 

Download the full New York/New Jersey Data Center Market Report.

Trends in Demand

The New Jersey market is made up of mostly larger colocation and single-tenant data center users. Typical requirements in the Northern New Jersey market are above 1 MW, but some companies entering the market will have requirements starting at 100 kW. Industries active in the Northern New Jersey market include financial, healthcare, media, and technology companies.

New Jersey is working its way back from a period in 2011-12 in which multiple service providers built new facilities at the same time, including new market entrants DuPont Fabros Technology (DFT), IO Data Centers and Sentinel Data Centers. This led to an oversupply condition in the market for wholesale space.

Despite a general lack of activity in recent years, the New Jersey data center market is starting to see an upswing in interest. Several major players in the industry, like CyrusOne and QTS Data Centers have recently entered the market, with others considering establishing a New Jersey presence. CyrusOne acquired Sentinel’s New Jersey operations in early 2017, while QTS acquired the former DFT facility in Piscataway in 2016 as well as a McGraw-Hill data center near Princeton in 2014.

The area’s proximity to other major markets in the region, as well as the connectivity to international markets in the UK and Canada, has made New Jersey an attractive location for international companies looking to locate in the US.

The Northern New Jersey data center market grew significantly following the economic downturn in 2009, as financial institutions looked to outsource their IT/ data center initiatives to retain capital.

Service providers have been among those filling data center space in New Jersey. In April, cloud infrastructure services provider ProfitBricks announced a five-year lease with Anexio, a tenant at the QTS data center in Piscataway. The company, which is a unit of Germany’s 1&1 Internet, chose to locate in the area due to the projected growth in cloud needs.

The Northern New Jersey data center market grew significantly following the economic downturn in 2009, as financial institutions looked to outsource their IT/data center initiatives to retain capital. A growing financial sector is a positive for the New Jersey data center market, due to its close proximity to Manhattan.

Trends in Supply 

The momentum for data centers slowed in 2013, when the New Jersey market faced an oversupply of space, particularly in the wholesale market. But the past year has seen a renewal of interest, including several providers bringing new supply online.

An interesting example is NJFX, a new player that reflects a trend in which colocation providers are building data centers at the sites where undersea fiber optic cables arrive in North America. NJFX is the largest and most ambitious of those projects. In late 2016 it opened 64,000 square foot Tier III data center built next to a cable landing station in Wall Township operated by Tata Communications. The 10-megawatt facility is about a mile from the ocean.

[clickToTweet tweet=”Data Center Frontier – The New Jersey Data Center market could soon see other new players.” quote=”Data Center Frontier – The New Jersey Data Center market could soon see other new players.”]

In March, 2017, just months after opening the new facility, NJFX announced plans to construct a second two-story data center on 48-acres of land adjacent to their existing facility. The new 80,000 SF data center will add to NJFX’s international connectivity services.

Meanwhile, CyrusOne has the opportunity to expand in Somerset. The former Sentinel New Jersey data center is about 95 percent leased, with the option to add up to 22 megawatts of additional capacity on adjacent land.

The market could soon see other new players. Aligned Data Centers is actively exploring expansion opportunities in major markets, including New Jersey, Northern Virginia, and Silicon Valley. Meanwhile RagingWire has expressed a desire to be in the top six U.S. data center markets, which suggests future sites in Chicago, Silicon Valley and New York/New Jersey.

Our New York/New Jersey Data Center Market Report also covers the following topics: 

For more on the New York/New Jersey data center market, we invite you to download the “Data Center Frontier Special Report: The New York/New Jersey Data Center Market,” sponsored by Digital Realty.  

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.

Sponsored Recommendations

Get Utility Project Solutions

Lightweight, durable fiberglass conduit provides engineering benefits, performance and drives savings for successful utility project outcomes.

Guide to Environmental Sustainability Metrics for Data Centers

Unlock the power of Environmental, Social, and Governance (ESG) reporting in the data center industry with our comprehensive guide, proposing 28 key metrics across five categories...

The AI Disruption: Challenges and Guidance for Data Center Design

From large training clusters to small edge inference servers, AI is becoming a larger percentage of data center workloads. Learn more.

A better approach to boost data center capacity – Supply capacity agreements

Explore a transformative approach to data center capacity planning with insights on supply capacity agreements, addressing the impact of COVID-19, the AI race, and the evolving...

Photon photo/Shutterstock.com

In the Age of Data Centers, Our Connected Future Still Needs Edge Computing

David Wood, Senior Product Manager – Edge Computing at nVent, explains why edge computing will play a pivotal role in shaping the future of technology.

White Papers

Get the full report

Getting to Green – Paving a Sensible Path To Sustainable Data Centers

April 19, 2022
This special report, courtesy of Kohler, explores the current state of the five sustainable energy sources recognized by the U.S. Energy Information Administration – solar, wind...