Large Deals Drive Strong Data Center Growth in Phoenix in 2022

Sept. 27, 2022
Phoenix saw 280 megawatts of data center capacity absorbed in the first six months of 2022, according to data from JLL,, making it the strongest leasing market in North America in the first half of 2022.

Phoenix saw 280 megawatts of data center capacity absorbed in the first six months of 2022, according to data from JLL, making it the strongest leasing market in North America in the first half of 2022. Phoenix edged out perennial leader Northern Virginia, which saw 257 megawatts of absorption.

The JLL data mark the first time in years that a region other than Northern Virginia had the strongest leasing. The JLL report stood out from other market research from this period in noting the exceptional growth in Phoenix. For example, data from CBRE had Phoenix third overall with 46 megawatts of absorption in H1 2022, trailing Northern Virginia (269 MW) and Silicon Valley (43.3 MWs).

Mark Bauer, the Managing Director for JLL’s Data Center Solutions Group in the Southwest, said the strong performance in Phoenix was driven by large customers seeking runway for growth.

“Much of the absorption was leasing by four or five hyperscale tenants with forward commitments,” Bauer said at the recent JLL Data Center Forum.  “Many are the second or third phase of existing campuses. There’s a growing trend of leasing multiple buildings to a single tenant.”

In 2021, Greater Phenix saw 26 MWs of absorption in the first half of the year and 150 MWs in the second half of the year. The stronger leasing in 2022 was a trend seen across the leading data center markets, as seen in this chart from JLL, which reflects the outsized demand seen this year:

In the second quarter, Phoenix’s vacancy rate dropped to 4.5%, the lowest it’s been since 1Q 2017, according to datacenterHawk. This is due in part to the record amount of demand that the market has seen over the past few quarters.

The Phoenix market is home to 2.6 million square feet (SF) of commissioned data center space, representing 458 megawatts (MW) of commissioned power at the end of the first quarter of 2022, according to market research from datacenterHawk. These metrics place Phoenix as a top five market for data center capacity in the U.S., joining Northern Virginia, Silicon Valley, Dallas and Chicago.

Users have long sought space in Phoenix as an alternative to California locations with higher cost and disaster risk. Phoenix has now become a data center destination in its own right, attracting a larger concentration of both customers and service providers in the process.

Two cities continue to see growth opportunities in the Phoenix market. In recent years, the vast majority of data center investment in Phoenix landed in the suburbs of Mesa and Goodyear. Current projects for those markets include 461 MW planned in Goodyear and 732 MW planned in Mesa.

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

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...

How Modernizing Aging Data Center Infrastructure Improves Sustainability

Explore the path to improved sustainability in data centers by modernizing aging infrastructure, uncovering challenges, three effective approaches, and specific examples outlined...

How Modern DCIM Helps Multi-Tenant Colocation Data Centers Be More Competitive

Discover the transformative impact of modern DCIM software on multi-tenant colocation data centers, enhancing competitiveness through improved resiliency, security, environmental...


Cooling the AI Revolution in Data Centers

Nathan Blom of Iceotope Technologies explains that by aligning liquid cooling strategies with broader business objectives, organizations can accelerate innovation, improve cost...

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...