Northern California Market Overview

Northern California is the second largest data center market in the country. Most companies objectively evaluating the market for expansion should be deterred by the area's expensive real estate, power costs, and risk of earthquakes. Despite these facts, consistent activity from large data center users and colocation/cloud operators over the last five years is the prime catalyst for the market's impressive ranking. Growth in the Northern California data center market has occurred in several cities south of San Francisco, with Santa Clara being home to the majority and in 2014, The Silicon Valley Leadership Group reported 33% of economic output in the area comes from technology companies. While the Northern California data center market benefits greatly from tech sector growth, it also heavily depends on it—posing a risk should the sector decline. Other industries consistently active and adding to the data center growth in Northern California include telecom, healthcare, financial, and retail.

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