North Carolina Hype Getting Out of Hand

By David Gross

North Carolina recently added Indian IT Services provider Wipro to its growing list of private data center builders, and it's been off to the races for industry pundits, some of whom are hyping North Carolina as the next great location for the industry.   I've written a couple articles about North Carolina, and agree that it's doing a good job recruiting brand name companies, but any comparisons to Silicon Valley and Northern Virginia are ridiculous.

The public data center market continues to be driven by bandwidth, while the private market is driven by power and tax incentives.  Not surprisingly, they're heading into different locations as a result.   Moreover, these fundamental attributes aren't changing much.   No one is talking about building their own private data center in Santa Clara or Ashburn, and none of the public providers are heading to rural Oregon or the banks of Lake Ontario.

Investors need to get beyond the hype and conventional thinking that spreads quickly, and look instead at the factors that go into data center site decisions, which change far less frequently than many other aspects of the data center industry.

Another Large Data Center for North Carolina?

By David Gross

The rural counties to the northwest of Charlotte, NC have become a hub for large data centers.   First, Google came to Caldwell County with its $600 million Lenoir, NC facility,   Then Catawba got Apple, which included having the company to pay $1.7 million for a house that sat on the land they needed for its $1 billion facility.    American Express added to the region's data center investments, with a $400 million project just over an hour away in Guilford County, near Greensboro.   Now it looks like the data center building boom in North Carolina will continue with construction expected to start month on a new facility in Cleveland County that could be expanded to nearly 500,000 square feet.

This new project is being developed by T5 Partners, a data center/call center development firm that spun out of former Dallas Cowboys quarterback Roger Staubach's real estate company.   Its first phase included conversion of an existing warehouse facility that is expected to be occupied soon.

Unlike other single-tenant data center hubs like the Buffalo, NY region and Oregon, the North Carolina counties are starting to compete with each other for these projects, as the witness neighboring jurisdictions increase their property tax bases significantly in these mostly rural, struggling areas.  In addition to generous tax incentives, this region sits close enough to the cities on I-85, including Charlotte, Greensboro, and Spartanburg, SC, that provide ample power and bandwidth supplies that would not be available in even more rural areas.


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