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Portland and Seattle, combined, have almost 3 million square feet of data center space and more than 500,000 additional square feet either planned or under construction. Now, a recent report by JLL shows that demand for colocation and data center real estate will remain strong over at least the next two years in Oregon and Washington.

Significant new construction is under way in markets like Hillsboro and central and eastern Washington. The region鈥檚 stable power costs, sales tax and use tax abatements, and clean renewable power are resulting in strong demand among data center users. Although many options exist for users with small requirements, JLL expects the market to swing more favorably toward data center providers over the next 12 months.

Meanwhile, colocation opportunities are increasingly being pursued because construction costs associated with new facilities are so high, according to JLL. The infrastructure investment can be up to two to three times as much, it said. The expense is greater for enterprise users that have increasingly shifted from new facilities to the third-party market to for cost and flexibility reasons.

鈥淩ental rates for colocation space have been stable in Washington and Oregon because of the variety of space available, but we see the high current demand resulting in higher rates perhaps as early as the second quarter of next year,鈥� said Conan Lee, the managing director for JLL鈥檚 Seattle office.