As the worldwide amount of digital information expands, demand for data centers will continue to grow. Supply of such centers is currently lagging demand, particularly in major urban centers, where low vacancy rates are driving strong rent growth. This trend will continue in the near term, facilitated in part by the high cost of new data center construction.

Looking forward, a combination of technological advances, rising energy prices and lower development costs likely will lead to the increasing decentralization of the market. Facilities in smaller cities, rural locations and abroad will offer lower costs while meeting the data needs of the typical user, resulting in the commoditization of the market.

BACKGROUND

Data centers are specialized facilities containing equipment to store, manage, process and exchange digital data and information. These facilities support the informational needs of organizations, including applications such as transaction processing,