Over the last five years, global data center needs have grown exponentially. The time is now for tenants seeking data center space and solutions. Providers are offering 10-15 percent discounts, concessions and tenant improvements on some deals. However, increasing demand and a pull-back on construction mean that by late 2015, the market will tighten and landlords will take control. Learn more about the current data center market in North America, and where it's headed.

1. A look at Data Centers in North America
2014

2. Data Centers Outlook
1
Two dynamics have propelled growth in the data center industry:
•Businesses outsourcing their IT infrastructure needs
•Popularization of cloud computing
In response to these trends, the North American data center market is expected to see its revenue grow by 32% from 2014 to 2016 to $14.8B

3. Data Centers employment
2
Source: IBISWorld, July 2014
0
100,000
200,000
300,000
400,000
500,000
600,000
2005
2007
2009
2011
2013
2015
2017
2019
Employment
Employment in the data processing & hosting services industry will increase by 17% from 2014 to 2019.

4. Industry insight
3
2.1%
3.7%
3.6%
3.4%
3.2%
2014
2015
2016
2017
2018
% Change in worldwide IT spending growth
Source: Gartner Worldwide IT Spending Forecast, Q2 2014
IT spending is tracking slower than expected but expected to jump 3.7% by 2015.

5. Demand drivers
4
Companies are leasing third-party data center space to:
•To mitigate capital expenditures
•Eliminate resource intensive maintenance responsibilities
•Lower facility operating expenses
•Accommodate rapid changes in data equipment needs
•Gain flexible power densities
•Access deeper technical expertise & innovations
•Free up IT resources

6. Supply drivers
5
Consolidation among large & new players is dominating the industry
Third party providers are spinning off assets into REITs &/or going public
Emergence of hybrid offerings and new services range from colocation hosting to complete turnkey or custom spaces

7. Real Estate insight
6
North American Data Center market
Tier 1 Data Center markets
Emerging Data Center markets
Atlanta
Boston
Chicago
Dallas
Los Angeles
New York/New Jersey
Northern Virginia
Phoenix
San Francisco/ Silicon Valley
Seattle
Houston
Philadelphia
Miami
Toronto
Denver
Baltimore
San Diego
Charlotte
Cincinnati
Las Vegas
Minneapolis
Source: 451 Research
Tier 1 data center market must-haves:
•Low cost electricity
•Enormous bandwidth
•Lower operating costs
•Fiber availability
•Low natural disaster risk
•Accessibility by car & air
•Attractive government incentives

8. The North American data center market
7
2014: 51% of all workloads will be processed in the cloud
TECHNOLOGY
CORPORATE
In 2017: Global data center traffic will triple to 7.7 Zb
3x
$79.1B
By 2018: Global market for cloud equipment will reach
2014: 74% of adults use social networking
By 2016: 50% of U.S. healthcare systems will use cloud storage
In 2014: U.S. retail e-commerce
sales increased
15.7%
87% of American adults use the internet and 68% connect via mobile devices
Financial firms account for 16% of data center revenue
INDUSTRY
Companies are moving away from internal IT management
Outsourcing data center functions is less expensive and improves efficiency
In 2014: U.S. companies paid an average of
$5.9M for data breaches

9. Market Outlook
8
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Atlanta
Chicago
Dallas-Fort Worth
Houston
Los Angeles
Minneapolis / St. Paul
Northern NJ
Northern Virginia
Phoenix
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Greater Toronto Area
Seattle-Portland
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Neutral market
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Silicon Valley
The window of opportunity is open for tenants seeking data center space and solutions.
To compete, providers are offering 10 – 15% discounts, concessions and tenant improvements on some deals.
By late 2015 and early 2016, leverage will shift toward providers and costs will start to trend upward.
Provider favorable market
User favorable market

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Contacts
9
Americas Research
Lauren Picariello +1 617 531 4208
lauren.picariello@am.jll.com
Atlanta
Mike Dolan
+1 404 995 2432
mike.dolan@am.jll.com
Ryan Fetz
+1 404 995 2132
ryan.fetz@am.jll.com
Chicago
Matt Carolan
+1 312 228 2513
matt.carolan@am.jll.com
Andy Cvengros
+1 312 228 3202
andy.cvengros@am.jll.com
Sean Reynolds
+1 312 228 3091
sean.reynolds@am.jll.com
Dallas – Fort Worth
Bo Bond +1 214 438 6238
bo.bond@am.jll.com
Ali Greenwood
+1 214 438 6237
ali.greenwood@am.jll.com
Curt Holcomb
+1 214 438 6240
curt.holcomb@am.jll.com
Houston
Bo Bond
+1 214 438 6238
bo.bond@am.jll.com
Ali Greenwood
+1 214 438 6237
ali.greenwood@am.jll.com
Curt Holcomb
+1 214 438 6240
curt.holcomb@am.jll.com
Los Angeles
Darren Eades
+1 213 239 6061
darren.eades@am.jll.com
Jordan Gaffney
+1 213 239 6041
jordan.gaffney@am.jll.com
Northern New Jersey
Jon Meisel
+1 973 404 1475
jonathan.meisel@am.jll.com
Thomas Reilly +1 973 404 1476
thomas.reilly@am.jll.com
Sumner Putnam
+1(973)404-1513 Sumner.Putnam@am.jll.com
Northern Virginia
Allen Tucker
+1 703 891 8396
allen.tucker@am.jll.com
Jeff Groh
+1 703 485 8833
jeff.groh@am.jll.com
Minneapolis/St. Paul
Brett Severson
+1 612 217 5143
brett.severson@am.jll.com
Brian Ginkel
+1 612 217 5127
brian.ginkel@am.jll.com
Phoenix
Mark Bauer
+1 602 282 6259
mark.bauer@am.jll.com
Mark Stratman Jr
+1 602 282 6260
mark.stratmanjr@am.jll.com
Greater Toronto Area
Stuart Cox
+1 416 525 4132
stuart.cox@am.jll.com
Seattle-Portland
Conan Lee
+1 206 607 1723
conan.lee@am.jll.com
Danny Jackson
+1 206 607 1798
danny.jackson@am.jll.com
Silicon Valley
Chris Sumter
+1 650 354 3346
chris.sumter@am.jll.com

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