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Las Vegas Property Development Conference: State of Data in Nevada

Mark Bauer 07/22/2020

Last week featured the latest installment of the Las Vegas Property Development and Infrastructure conference featuring two full days of real estate info largely based around recent shifts due to COVID. With the focus obviously being on the Nevada real estate market, Mark Bauer and Raul Saavedra of JLL along with a few other panelists spoke about the past, present and future of data centers in Nevada. See the video above for the full event, however, some interesting tidbits from the conversation and individual panelists follow:

Jeff Brigger – NV Energy

Jeff Brigger kicked the panel off voicing his optimism for the future of data in Southern Nevada, specifically in Henderson and North Las Vegas. Labor was touted as a massive segment of viability when evaluating opportunity throughout the call, and Jeff cited a 13% growth rate overall for data processing and hosting professionals in the area.

Along with labor, a certain level of flexibility is needed to meet the goals of the client and attract key players. That flexibility is built into things such as unique service level agreements and state-of-the-art facilities that allow the partitioning of space in ways that fit the client.

Mark Bauer – JLL

Mark Bauer introduced several interesting points regarding land and the current surge towards optimizing your online presence to stay afloat amongst increase online activity. Companies that weren’t particularly worried or involved have quickly adapted or buttressed their cloud and online services to deal with the increased bandwidth of 100% online business.

In terms of land, building a data center is like “building a small town.” Places like Phoenix, Henderson, and Dallas have the land available to do this, however, the more important pieces are power and connectivity. Many areas of Nevada have seen giant leaps in connectivity in recent years while also being able to benefit from free-cooling to lower costs in the warmer weather year-round. The Phoenix Metro area has seen massive activity due to innovations in these categories with Nevada looking to follow suit in a similar fashion throughout the near future.

Raul Saavedra - JLL

Raul Saavedra touched on some tactics and financial bits that seem to be currently in favor of Nevada’s current landscape in regards to land. Comparisons to office were made in several different scenarios, as data centers often cost well over the office threshold per square foot due to equipment and facilities.

A “solution scale” was mentioned, involving the most important piece of large players in the industry: time to market. When entering a market, knowing your competition and working together with the agencies that an operator is going to touch are pivotal aspects. Once those two factors are predictably under control, time to market is paramount for the final decision to enter a market, which could be very favorable in Nevada’s current climate.

Jeremy Ferkin – CenturyLink

Jeremy Ferkin joined with powerful points on the power of latency and the ability to expand as a colocation center. In its simplest form, the further you are from your data, the more latency you can expect. After latency breaks 50 milliseconds, the human eye begins to catch on to those visible delays. When applications linked to activities such as medical procedures or online speeds we run into massive viability problems, making a great case for building more infrastructure in more obscure places like Nevada.

Equally important to latency is a developer’s ability to rapidly expand as early as possible. This often means beginning expansions before the initial location is even delivered, with locations such as Southern Nevada and Greater Phoenix offering this luxury with lots of available land. Although land is important, expansion also depends upon power, connectivity and talent.

 

Overall, Nevada has a potentially bright future in data as the southwest continues to flow towards secondary markets to take advantage of lower costs and available land. In the words of Jeremy Farkin, “The world is not going away from data. Communities that make it easer for big logos to operate is where they’re going to go.”

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