Recent research has shown that demand for data center services has considerably increased in Texas, so much so that it has outpaced national computing needs. Spurred not only by client demands, but the prospect of receiving data center tax incentives as well, a number of service providers have launched new Texas data center projects, including CyrusOne.
Exceeding National Demands
According to industry research, demand for top-tier data centers in Texas has exceeded the need for services throughout the entire country. This outpace of national demands is due to a number of reasons, including supply and demand, power and facility ownership. This has shifted the traditional Texas data center market, where larger deals usually went to providers located in New Jersey and Silicon Valley.
This is creating a number of other market changes as well, such as increased opportunities for data center services providers, as well as rising pricing pressure to maintain a favorable industry position. At the same time, the rise in demand shows that companies are more frequently trading in their on-premise technology operations for outsourced services from a data center provider.
Amish Gupta, Real Estate Tax Consultants Group chief operating officer, noted that Texas has recently garnered considerable attention for the state’s prosperous economic conditions, as well as its job and population growth.
“As a result, numerous corporations have been drawn to relocate here, putting Dallas at the forefront of the corporate relocation trend,” Gupta stated. “With this economic boom comes an increased need for data management and data centers – a growing industry in Texas.”
Data Center Tax Incentive Considerations
However, with the data center market booming in Texas, Gupta pointed out that this is all new, particularly for the property appraisers that evaluate facilities for data center tax incentives. As a result, providers should keep in mind a few considerations when seeking tax breaks in the state, including:
- Assuring that real estate and personal property assessments are carried out appropriately to prevent double taxation. Personal property – including software, cooling systems and cabling – could be accounted for twice.
- Checking the computing equipment depreciation schedule against the information the appraiser is utilizing. The appraiser may be using a schedule that is better suited for commercial property, where certain items depreciate slower.
CyrusOne’s New Texas Data Center
One organization taking advantage of these beneficial market conditions is CyrusOne, which broke ground on its new Texas data center earlier this year. The San Antonio data center is currently in phase 1 of construction and will feature 200,000 square feet of space and up to 40 MW of power capacity. CyrusOne is working with Swinerton Builders on its new facility, and plans to have the first phase completed by the end of 2014.
This project represents the second San Antonio data center for CyrusOne, bringing their Texas data center count to 10.