Bergen Record Examines NJ Data Center Market

Readers tracking the data center market in New Jersey will be interested in a story in Sunday's Bergen Record that reviews the surge in activity in data center construction in northern NJ, including new projects by Internap, CoreSite and Telx (they seem to have missed a recent project in Totowa from Digital Realty).

"Some real estate executives say this burst of activity will add inventory to a data center market that, while poised to grow dramatically the next five to 10 years, is already overbuilt," the paper reports. "In its third-quarter data center report, Cushman & Wakefield pegged the vacancy rate for North Jersey data center space at about 20 percent. ... Third-party data center providers, in contrast, maintain that in the wake of superstorm Sandy and bolstered by the improving economy, there is already enough demand to justify their investment in additional facilities. And many of these providers estimated that the data center vacancy rate is far below 20 percent."

The story picks up on some - but not all - of the complexity of the New Jersey market, where demand for data center space is segmented between single-tenant facilities, “wholesale” data center space and retail colocation providers. The demand outlook also varies between the northern counties adjacent to New York City and the growing cluster of wholesale providers setting up shop in central New Jersey.