COLUMBUS, OHIOproperties.cbre.us/cologixcol3/assets/columbus-data-center-snapsho… · Columbus’ reliable power and robust data fiber network, its geographic proximity to about

COLUMBUS, OHIO

Prepared by: Doug Godard, MCR, LEED APSenior Vice President+1 614 430 [email protected]

DATA CENTER SNAPSHOT

CBRE | Columbus Data Center Snapshot

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OVERVIEW

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Columbus is an emerging data center market with great momentum. In the past 10 years, Columbus has evolved from a location of choice for many corporate enterprise data centers to one of the world’s top locations for Internet Cloud operations. Columbus has now gained the attention of national colocation data center operators. Columbus’ reliable power and robust data fiber network, its geographic proximity to about half of the U.S. population and the resulting lower latency, and its pro-business environment with a favorable tax climate is bolstering Columbus’ standing as one of the hottest data center markets in the country.


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COLUMBUS REGION OVERVIEW

ColumbusState capital and largest city in Ohio

Strategic LocationWithin a 10-hour drive of 47% of the U.S.

population

HeadquartersHome to 15 Fortune 1000 companies,

including 4 Fortune 500 companies

Population of 2.1 Million2nd fastest growing large metro area in

the United States

Student Concentration2nd largest (next to Boston) in the

number of college students in a metro area and home to one of the largest research universities in the country –

The Ohio State University

IBMIBM operates its Global Client Center

for Advanced Analytics (Big Data) with a workforce of over 1,200. Developing with The Ohio State University data analytics

undergraduate majors

BattelleHome to the world’s largest nonprofit contract research organization which

spends $5 billion on research annually

Hospital SystemsHome to four healthcare systems with

annual revenues exceeding $1 billion each


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UNITED STATES – MAJOR DATA CENTER MARKETS

Source: CBRE Research/CBRE Data Center Solutions, Q4 2016 *Rental rates are quoted asking rates for 250+ kW at N + 1/Tier III requirements. Arrows indicate year-over-year changes.

On the heels of record-setting levels of activity in 2015, national demand for data center space remained robust in 2016 and has continued into 2017. Cloud Service Providers (CSP) have been a key driver of activity and demand as CSPs accounted for more than 75 megawatts (MW) of pre-leased capacity across projects delivered in the five top U.S. markets. These CSP deployments into third-party/multi-tenant facilities are likely as much “speed-to-market” driven as they are strategic – the adoption of Cloud among enterprise users occurring at an even faster rate than Cloud providers had anticipated. Many CSPs also appeared to be adopting a “tripod” (or active-active-active) strategy in key markets as they build and expand their Cloud infrastructure. CSPs are defined as public, private or hybrid Cloud providers. The world’s largest Hyperscale Cloud providers are making large strategic investments in facilities to serve the exponentially growing Cloud market. Latency has become increasingly important as corporations deploy their cloud strategies with the CSPs.

MARKET FUNDAMENTALS

MARKETNEW DELIVERIES

(MW)SUPPLY

OUTLOOKABSORPTION

(MW)DEMAND

OUTLOOKWHOLESALE RENTAL RATES

(KW/MO)

Northern Virginia

97 84.4 $120-$145

Silicon Valley 3 11.7 $145-$165

Chicago 39 36.2 $130-$145

NYC/NJ 5 2.8 $135-$150

Dallas/Fort Worth

47 37.6 $120-$145


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UNITED STATES – IoT NEED FOR SPEED

Network and connectivity are the fastest emerging, and perhaps most critical attributes of investment-grade data center real estate. A data center with redundant power and superior bandwidth becomes increasingly more marketable as replicating connectivity ecosystems and power configurations is often prohibitively expensive, if not impossible altogether. The importance of connectivity can only be underscored as the number of connected devices grows exponentially, a byproduct of technology and interactive capabilities being integrated into nearly everything – from autonomous cars to smart appliances and augmented reality apps. With the proliferation of IoT (Internet of Things), proximity to end users is becoming paramount and should only fuel the race to the “Edge” – the need for content delivery proving key for future data center demand. Columbus is strategically located with “Edge” presence for network and connectivity. The City of Columbus won the U.S. Department of Transportation’s $50 million Smart City Challenge in June 2016 (with a matching $90 million from Columbus corporations) after competing against 78 cities nationwide – which included Austin, Pittsburgh, Boston, Denver, and San Francisco. With the Smart City grants, Columbus will harness technology, data, and creativity to re-imagine how people and goods are moved – which will include autonomous trucks and cars. Columbus’ network and connectivity will fuel this technology.

NETWORK #SMARTCOLUMBUS


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COLUMBUS – THE LIT QUAD & GOLDEN TRIANGLE

The Lit Quad is comprised of four major data center markets in the United States: Northern Virginia, Chicago, Silicon Valley, and Dallas. The Golden Triangle is comprised of N. Virginia, N. New Jersey and Chicago. Columbus is physically located on both the Lit Quad and the Golden Triangle. The majority of data transmission in the United States occurs in these markets. Columbus is one of two Eastern United States regional centers for the world’s largest Hyperscale CSPs. Given Columbus’ physical location on both the Lit Quad and Golden Triangle, Columbus is strategically located in one of the highest concentration areas of data transmission and storage in the United States. With lower latency, and geographic proximity to about half of the U.S. population, Columbus has become an on-ramp to long-haul transmission networks. Columbus has become a BIG DEAL in terms of public, private and hybrid Cloud and with content providers that need to be at the Edge.

SILICON VALLEY

OREGON

DALLAS

CHICAGO

N. VIRGINIA

N. NEW JERSEY

COLUMBUS

Hyperscale CSP

Hyperscale CSP

Hyperscale CSP

Hyperscale CSP


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COLUMBUS – THE WORLD’S LARGEST HYPERSCALE CLOUD SERVICE PROVIDER AS A DRIVER

Columbus has benefited from the push from Cloud providers to operate from the Edge. The largest Hyperscale Cloud Service Provider in the world has established its U.S. East (Ohio) in Columbus. In 2015, this Hyperscale CSP brought online three data center campuses in the Columbus Region – located in New Albany, Dublin and Hilliard. Fully developed, they will have five-150,000 SF data centers in each campus with a total power capacity of over 300 MW. This places Columbus in the same category as Northern Virginia and Silicon Valley. Columbus’ Midwest geography and lower latency has become a driver for corporations, Cloud service providers, and content providers. They need physical proximity to this Hyperscale CSP and they are investing in data center operations in Columbus.

DUBLIN

HILLIARD

NEW ALBANY


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COLUMBUS – LOW LATENCYThe Columbus Region’s physical location relative to population bases in the United States lends itself to relatively low latency. Latency was most likely a large factor in the world’s largest Hyperscale CSP’s decision to develop their second US-East Region data center hub in the Columbus Region with an announced spend of over $1.1 billion. Cloud service providers and content providers are moving to the “Edge” to provide faster downloads of large amounts of content and the Columbus Region is satisfying that need

<5ms<10ms<15ms<20ms<25ms<30ms<35ms<40ms>40ms

Dayton, OH 2.29

Cincinnati, OH 3.58

Akron, OH 3.83

Cleveland, OH 4.19

Toledo, OH 6.10

Indianapolis, IN 6.30

Pittsburgh, PA 6.74

Detroit, MI 7.73

Nashville, TN 9.29

St. Louis, MO 10.59

Philadelphia, PA 11.43

Chicago, IL 12.25

Northern VA 14.88

Kansas City, MO 14.96

Washington, DC 15.36

New York, NY 16.77

Atlanta, GA 20.07

Northern NJ 20.36

Boston, MA 20.42

Charlotte, NC 21.25

Miami, FL 23.04

Toronto, Canada 26.77

Denver, CO 34.44

Dallas, TX 35.18

Houston, TX 36.27

San Francisco, CA 63.39

Phoenix, AZ 63.51

Silicon Valley, CA 63.53

Los Angeles, CA 65.90

Seattle, WA 67.70


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COLUMBUS – RELIABLE POWER

One of the benefits for a company locating data center operations to the Columbus Region is the availability of reliable power. The Columbus Region’s power grid is served by American Electric Power’s (AEP) regional network comprised of multiple 345kV & 138kV transmission lines and a massive 765kV transmission backbone system that is connected to generation plants. Many of these incoming transmission lines connect to a 345kV transmission system that encircles the Greater Columbus Area. From this “wheel”, transmission lines act as “spokes” routing to the area’s substations. If a transmission line serving a substation goes down, circuit breakers isolate the troubled line section and reroute the power automatically to the substation through another transmission line – resulting in no loss of power. AEP is in the process of constructing an additional substation in close proximity to New Albany that will step down another 765kV transmission line, further bolstering the reliability of the Columbus Region’s transmission grid.


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COLUMBUS – MARKET DEMAND FOR DATA CENTER SPACE/POWER

In the not-too-distant past, Columbus-based companies with data center needs had limited options. Companies with larger requirements could choose to build their own data centers or they could take their requirements out-of-state. There were few colocation data center facilities or operators that were suitable for their mission critical operations. Recently, Cologix and Expedient have developed Tier III-type facilities that are concurrently maintainable. This new development represents a positive direction.

Cologix


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COLUMBUS – COLOCATION MARKET

The colocation data center market in Columbus is still evolving. In 2014, Cologix acquired the colocation data center business and the real estate of Datacenter.BZ. Cologix subsequently purchased adjacent land and, in Q4 2017, will deliver a 160,000 SF, 12 MW colocation data center adding to their campus. Phase I will consist of a 20,000 SF, 3 MW data hall. Expedient constructed Phase I of a 60,000 SF colocation data center in Q4 2015. The initial Phase I is 30,000 SF, has 10,000 SF of white floor area, and 1.5 MW of power.

PCM

eNET, Inc.

CenturyLink

IBM

Verizon

WeConnect

Metro Data Center

Patrick Solutions Inc.Citynet, LLC

Cogent Communications, Inc.Lightower Fiber Networks

iBeam SolutionsRackSquared, LLC

WOW BusinesszColo Zayo

Expedient Data Centers

CeraNet, Inc.

CologixXO Communications

Expedient Data Centers


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PREPARED BY:

Doug Godard is a Senior Vice President in CBRE Data Center Solutions. For over 30 years, Doug has advised clients on network and data center solutions including national site selection, colocation facilities, and TCO analysis. Doug takes a lifecycle approach to data center assignments by working closely with CBRE team members in consulting, transactions, project management, facility management, and capital markets to provide the most appropriate and cost effective data center solutions for his clients. Doug is a LEED® Accredited Professional.

DOUG GODARD, MCR, LEED APSenior Vice President

T: +1 614 430 [email protected]

Doug Godard, MCR, LEED APSenior Vice President+1 614 430 [email protected]

Thank You!

CBRE © 2017 All Rights Reserved. All information included in this proposal pertaining to CBRE—including but not limited to its operations, employees, technology and clients—are proprietary and confidential, and are supplied with the understanding that they will be held in confidence and not disclosed to third parties without the prior written consent of CBRE. This proposal is intended solely as a preliminary expression of general intentions and is to be used for discussion purposes only. The parties intend that neither shall have any contractual obligations to the other with respect to the matters referred herein unless and until a definitive agreement has been fully executed and delivered by the parties. The parties agree that this proposal is not intended to create any agreement or obligation by either party to negotiate a definitive lease/purchase and sale agreement and imposes no duty whatsoever on either party to continue negotiations, including without limitation any obligation to negotiate in good faith or in any way other than at arm’s length. Prior to delivery of a definitive executed agreement, and without any liability to the other party, either party may (1) propose different terms from those summarized herein, (2) enter into negotiations with other parties and/or (3) unilaterally terminate all negotiations with the other party hereto.

The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of

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COLUMBUS, OHIOproperties.cbre.us/cologixcol3/assets/columbus-data-center-snapsho… · Columbus’ reliable power and robust data fiber network, its geographic proximity to about