More Big Deals Lurking in Virginia?

It's been a surprisingly strong year leasing of data center activity in northern Virginia, with more than 25 megawatts of leasing in the first half of 2012, according to a market update from Jim Kerrigan at Avison Young. There may be more big deals in the works in the second half of the year. "There are three, 5 to 7 MW deals currently under consideration in the Northern Virginia market," Kerrigan writes. "Expect lease signings by year end."

Northern Virginia has traditionally been one of the strongest data center markets. There is plenty of demand, but the region also has plenty of supply, due to the strong construction activity. There are seven facilities in the Virginia market that can offer at least 1 megawatt of critical power capacity, Kerrigan says, which has affected some deal terms.

"Excess inventory has led to an increase in concessions, including rent abatement, favorable expansion options, cash allowance for equipment installation and caps on PUE & utility costs," he writes."The result has been a reduction in pricing of 15%, with pricing expected to remain stagnant for the next 12 to 18 months."

See the Avison Young newsletter for the full market overview.

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