(TNS) — Tucked away in the suburbs around Texas’ largest city, giant, windowless buildings are rapidly popping up across hundreds of acres.
The building, which looks more like a warehouse than anything to do with technology, houses the servers and other equipment needed to stream video and music, buy and sell products on Amazon, conduct online banking, and post on social media. It is accommodated.
The surge in demand for power-hungry data centers is due in large part to the growth of artificial intelligence and other cloud-based technologies that are key to Americans’ online lifestyles.
Brant Burnett, Senior Vice President, Data Solutions Group, CBRE Group Inc.
But while data center inventory has steadily increased in the South Texas region, which includes San Antonio, it has far outpaced the explosive growth in the Dallas-Fort Worth region, which has become a national data powerhouse.
North Texas currently ranks second among U.S. markets for data center inventory, which will increase by 173.1 percent to reach a total of 565.3 megawatts in the second half of 2023, according to commercial real estate services firm CBRE. This puts it behind Northern Virginia, the data center capital of the world, but ahead of Silicon Valley, Chicago, and Phoenix.
Among secondary markets, the Austin-San Antonio region ranked second with 162.2 megawatts, an increase of 7.5% from the second half of 2022. It lags behind central Washington, but has more inventory than Southern California, Seattle and Houston, with the latter ranking fifth. 134.1 megawatts.
Vacancy rates for the second half of 2023 are 7.4% in Dallas-Fort Worth, 1.8% in Austin-San Antonio, and 19.7% in Houston, with most of the properties under construction already leased and spaces remaining. It is shown that. It’s being picked up right away.
Why Texas?
Texas’ appeal is because power costs are relatively low compared to other parts of the country, data centers are power guzzlers, which is a big incentive, and it’s easily accessible from both coasts, Barnett said. Ta.
Other factors include weather, topography, and proximity to airports, dams, and water towers. Hurricanes, ice storms, and other natural disasters are fairly unlikely to occur in San Antonio, Dallas, or Austin. With dangerous hurricane weather expected in Houston, some Houston-based companies want to be located closer to their facilities.
There is plenty of land, which is becoming increasingly important as companies build larger centers, but the key is whether the land has electricity infrastructure in place.
“It’s not the availability of land that matters, it’s the availability of land that can deliver power and get power in a timely manner,” said Chris Herman, senior vice president of CBRE’s Data Solutions Group. . “There’s a big part of the Austin and San Antonio market, the D-FW market that a lot of developers and operators are looking at. They’re up for grabs — the land is there. But the question is , how quickly can we deliver power. That’s really the name of the game right now.”
That’s putting pressure on utilities. CPS Energy is preparing for a tenfold increase in demand from data centers, which by 2033 is expected to consume more than 3,300 megawatts. This is enough to power more than 650,000 homes.
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Texas regulations allow the power lines needed to power the centers to be built faster than in many other states, another reason for the uptake, but they still aren’t as fast as companies want them to be. It can’t be installed quickly, said Rudy Garza, president and CEO of CPS Energy. Late last year, the power company’s trustees said:
Locally, facilities are being built as far west as Bexar County for companies and government agencies such as Microsoft Corp., Valero Energy Corp., Frost Bank, Christus Health, Lowe’s, Amazon and the National Security Agency. CloudHQ, a company that builds large hyperscale data centers, and an affiliate of Vantage Data Systems bought the land there last year.
Some of these companies received tax breaks and subsidies to build the centers years ago, but the city has since stopped doing so. CPS leaders said they are trying to direct businesses away from the area and into the eastern and southeastern parts of the county to spread the power load and prevent congestion.
Companies such as Skybox Datacenters, Switch, and Sabey Data Centers are building and expanding data centers in the Austin area. Prime Data Centers LLC plans to build a data center on approximately 206 acres near San Marcos. The company will receive property tax incentives worth $840,000 from Caldwell County for the first phase of the project, which is expected to cost $1.3 billion.
Barnett and Herman said the distribution of power infrastructure and how quickly it can be built will determine where new data centers are located.
“The corridor between Dallas and Austin, between Austin and San Antonio, and all of those and Houston is poised for tremendous data center growth over the next 10 years,” Barnett said.
©The 2024 San Antonio Express-News, distributed by Tribune Content Agency, LLC.
