Southern Cal Emerges as Key Data Center Hub
The lack of available power in the US, record low data center vacancies across the US and the region's position as the entertainment capital are driving Southern California’s Data Center resurgence, according to JLL.
“[Entertainment] is creating significant demand for streaming and content creation, edge computing and low-latency services, and major cloud providers expanding for local demand to service the 23 million+ people in the region,” Darren Eades, managing director at the brokerage, said.
That, combined with the area's role as an international gateway for trans-Pacific connectivity to APAC and a telecom fiber hub at One Wilshire, makes it a strategic location.
After a period of stagnation, Los Angeles – with its 305-megawatt (MW) of operational capacity set – is to double if the planned pipeline is approved, according to Cushman & Wakefield’s 2025 Global Data Center Market Comparison.
The timing of approvals depends on a variety of factors, including decisions from planning and permitting authorities or announcements from developers, John McWilliams, head of data center insights, Cushman & Wakefield, told GlobeSt.com.
“These variables make it difficult to predict when approvals will be finalized,” he said. “However, the resurgence of data centers in this area reflects the growing demand for infrastructure in a market that offers both strategic advantages and the capacity to support large-scale projects.”
El Segundo and Vernon continue to be a focus for new data center development, with several projects in the pipeline, such as one in Monterey Park set to begin this year.
“Vernon became a focal point for data centers after JLL worked with Prime Data Centers to plant their flag in the City,” Eades noted.
“Vernon has cheaper power due to its own generation plant and has realized the major benefits to the City of attracting data centers. Since Prime, three other data centers are under construction and in planning stages. This should, however, tap the City of power, thus forcing operators to look elsewhere for opportunities.”
McWilliams talked more in-depth about the city, touting its proximity to downtown LA, density, industrial zoning and power costs.
“Additionally, Vernon’s municipal utility provides reliable power, and the city’s ability to operate somewhat independently allows for streamlined permitting and site development processes, which are key advantages in a competitive market," he said.
Currently, there are 64 operational data centers in the LA market, with 48MW under construction that is expected to come online within the next three years, according to McWilliams.
“While there are projects in the planning phase, it’s unlikely they will progress to operational status within that same timeframe due to the complexities of the development process,” he said.
Source: GlobeSt/ALM