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Hillsboro is fast becoming a nationally recognized market for data centers, with two major facilities expected to be delivered this year.

Data centers with 18 megawatts of capacity are under construction in Hillsboro, according to CBRE, which last week released a report on the national data center market. More are likely to be built, according to the commercial real estate firm.

鈥淲e anticipate growth to continue,鈥� said Edward Socia, director of research for CBRE.

Hillsboro is attractive because of certain tax advantages 鈥� namely, its lack of state or local sales tax and relatively low property taxes 鈥� and connectivity to high-tech hubs in Seattle, Silicon Valley and Los Angeles, Socia said.

鈥淥verall, the tax climate is more favorable versus Silicon Valley or another area,鈥� he said.

Hillsboro’s data center projects include:

• Digital Realty‘s 12-megawatt center, all of which has been pre-leased, according to CBRE;
• NTT Global Data Centers‘ first local data center, a 6-megawatt facility, anticipated to be followed by four additional buildings; and
• 21 additional megawatts of capacity in the works for QTS, which saw its 3-megawatt facility delivered in the first quarter of 2020.

The new data centers will add to 63.4 megawatts of existing facilities in Hillsboro.

Demand is expected only to grow with the rise of cloud computing, edge computing and robotics.

鈥淲e think there’s going to be inherently more growth in this space,鈥� said Pat Lynch, senior managing director for CBRE’s Data Center Solutions.

Hillsboro offers low-latency access to other West Coast markets, including the regional carrier for the NWAX-IX exchange located in the Pittock Block building in downtown Portland, CBRE’s report stated.

All of the local projects are in an industrial district near Hillsboro Airport. The data centers are within Hillsboro’s urban growth boundary.

The flurry of construction and land acquisition has created some barriers to entry for competitors, according to CBRE.

Nationally, Northern Virginia remained the top data center market with net absorption of 93.2 megawatts in the first half of the year. Central Washington also ranked highly, with 13.9 megawatts coming online this year.

The projects have been boosted by support from local officials and economic development offices.

鈥淭he region has generally embraced this type of use, which is important,鈥� Lynch said.

Some opposition has sprung up around Facebook‘s landing for undersea fiber-optic cables in Tillamook County on the Oregon Coast. A Facebook subcontractor, Edge Cable Holdings Inc., suffered a drilling accident in April that left 6,500 gallons of drilling fluid and other equipment in the ocean, in August.

The CBRE representatives declined to comment on whether the Facebook incident would affect data center development.

Investors’ interest in data centers remained strong during the first half of the year, led by Mapletree’s $557 million acquisition of a 10-property portfolio from Digital Realty.

Overall, data center inventory grew 5 percent in major markets during the first half of 2020, with 134.9 megawatts of net absorption. Projects totaling more than 373 megawatts were under construction.