Secondary Market: Denver

Colocation Insights

• Hyperscale edge deployments constituted most absorption in 2022.

Market Trends

• Data center developers are focused on Aurora and Colorado Springs, due to land and power availability.
• Rack density is increasing to accommodate future loads.
• Most operators are deploying cooling solutions that require less water.
• Xcel Energy plans to provide a carbon-free electrical system by 2050, with an 85% reduction in CO2 emissions from 2005 levels by 2030. This goal will be accomplished by generating electricity from 80% renewable sources.

Notable Activity

• Microsoft and QTS Data Centers made large land acquisitions in Aurora.
• IPI Partners-backed Radius Data Centers acquired a downtown Denver data center at 1500 Champa St., to create a carrier-dense colocation offering.
• CoreSite acquired land north of downtown for a new campus.
• The Department of Defense awarded a $9B JWCC contract to Oracle, AWS, Microsoft, and Google, so the DoD can acquire cloud services directly from these providers.
• Multiple developers are targeting Aurora and Colorado Springs to capture federal cloud workloads, given the region’s proximity to significant military installations.

Figure 1: Historical Market Information

Source: CBRE Research, CBRE Data Center Solutions, H2 2022.

Figure 2: Historical Supply and Demand

Source: CBRE Research, CBRE Data Center Solutions, H2 2022.

Figure 3: % of Total Secondary Market Inventory

Source: CBRE Research, CBRE Data Center Solutions, H2 2022.

Figure 4: Market Fuel Mix

Source: Xcel Energy.

Figure 5: Average Asking Rates

Source: CBRE Research, CBRE Data Center Solutions, H2 2022.