Investors Increasingly Comfortable with Data Center Investments Across the Risk Spectrum – Silicon Valley, Northern Virginia and Phoenix Drawing the Most Investor Interest in the U.S.

PHOENIX, ARIZONA — The strong appetite for data, fueled by continued growth in cloud computing and social media, and the emergence of new technologies such as 5G and autonomous vehicles, is driving increased investor interest in data centers, according to a new CBRE survey.

Ninety-five percent of survey respondents, which include many of the world’s largest institutional real estate investors, plan to increase their capital deployment in the global data center sector in 2022. Capital allocated to the sector continues to expand with more than three-quarters of investors allocating over $100 million of equity to the global data center sector for 2022 and nearly half allocating over $300 million.

Investor interest in the global data centers sector is robust across the risk spectrum, with half of respondents expressing interest in opportunistic/new development, value-add and core-plus offerings in 2022. Two-thirds of respondents are interested in pursuing opportunistic/new development investments this year.

Silicon Valley is the most desirable U.S. data center market, favored by 38% of investors surveyed. The reasons for the market’s appeal are its strong economic fundamentals, stability and availability of product, the survey found. Other primary data center markets favored by investors include Northern Virginia (36%), Phoenix (29%), Chicago (28%), Atlanta (27%), Dallas/Ft. Worth (26%), and New York Tri-State (24%). Higher initial returns relative to other markets was cited by investors for interest in emerging markets such as Houston, Minneapolis and Boston.

“Data centers is a high-growth real estate sector with extremely positive fundamentals,” said Kristina Metzger, Leader of Data Center Capital Markets for CBRE in North America. “Investors are flocking to data centers because of the stability they provide as mission-critical infrastructure hubs for global business. The emergence of new technologies, such as 5G, Artificial Intelligence and autonomous vehicles, holds promise for further explosive growth in data use and thus, data center demand.”

Key Highlights:

• Investors intend to materially increase their overall percentage of data center assets under management over the next five years. While 49% have less than 5% exposure to data centers today, only 21% of respondents expect to have less than 5% in five years’ time.
• Over the next 12-24 months, 32% of respondents see operating platform/entity investments as the greatest investment opportunity in the sector, ahead of hyperscale build-to-suit investments with 22%.
• 78% of respondents cited high valuations and intense competition as their greatest challenges to achieving their current investment strategies.
• 45% of respondents anticipate continued cap rate/yield compression in 2022.
• 72% of respondents cited Environmental, Social and Governance (ESG) considerations “highly important” in their overall data center investment strategy.

PIMA COUNTY, ARIZONA – The Pima County Board of Supervisors voted unanimously Tuesday to approve an agreement with American Heritage Railways as the new operator of Old Tucson Studios.

Old Tucson Studios (OTS) has been a landmark in Pima County since 1939, serving as the backdrop for hundreds of film and commercial shoots. Located in the picturesque Tucson Mountain Park, the property has served as a major tourist attraction. OTS closed its doors in 2020, when its former owners notified Pima County they would be terminating their lease.

The county began searching for a new operator and, in 2021, negotiations began with American Heritage Railways (AHR).  Founded in 1998, AHR specializes in the railroad, entertainment, theatrical, and hospitality industries. Its subsidiary corporation, Old Tucson Entertainment LLC, will manage and operate the property as a public Western Frontier-type recreational and entertainment venue.

“Old Tucson Studios has so much rich history that needs to be preserved and shared with the world,” said John Harper, Chief Operating Officer of Old Tucson Entertainment. “We look forward to working with production companies to provide a real western town experience in an amazing location that has all the characteristics any company is looking for.”

Pima County Attractions and Tourism Director, Diane Frisch, said the company’s ties to the film industry can help bring movie magic back to the beloved landmark.

“This marks an exciting new phase in Old Tucson’s storied legacy,” said Frisch. “We are so excited to see this enormous economic driver for our region brought back to its full glory, and are confident American Heritage Railways is the company to help make that happen.”

The first major event planned for the studios is the Halloween attraction “Night Fall,” which will be followed by a Christmas event.

Humane Society of Southern Arizona & Arizona Humane Society Receive American Rescue Plan Act Funding to Keep Pets and People Together 

PHOENIX, ARIZONA – Governor Doug Ducey visited the Arizona Humane Society’s (AHS) Sunnyslope Campus in Phoenix in honor of Arizona Gives Day. He was accompanied by Steve Farley, CEO of The Humane Society of Southern Arizona (HSSA) and Dr. Steven Hansen, CEO of AHS. Arizona Gives Day is happening now through April 6th and you can support HSSA at www.hssaz.org/azgives (You can access B roll video and photos of the tour here.)

HSSA and AHS recently received funding from the Governor as part of the American Rescue Plan Act (ARPA) to support pet owners impacted by the COVID-19 pandemic. The investment will expand HSSA’s and AHS’ dedication to keeping pets and people together despite hardships they may face. This includes an expansion to programs for pet owners including affordable veterinary and pet wellness services, a critical need at a time when the country is facing a veterinary shortage. Together, the nonprofit organizations will be able to help more than 9,000 additional low-income pet owners.

For HSSA, these funds will be used to acquire and maintain life-saving clinic equipment and expand the number of pets served at the Humane Society of Southern Arizona’s low-cost veterinary clinic as well as to provide necessary program support for HSSA’s growing youth, adult, and pet educational classes, camps and services that will take place in the Freeman Education and Behavioral Center slated to open in Fall of 2022.

The ARPA funding will also support an expansion of AHS’ Project Home Away from Home program, a temporary Foster Hero program established as part of Pet Housing Help AZ to prevent pet surrenders due to loss of employment or housing instability caused by the pandemic. It is also designated for AHS’ emergency response efforts.

For those interested in taking part in Arizona Gives Day (April 5th and 6th) please donate at www.hssaz.org/azgives and join our community of animal advocates and partners across Arizona. To learn more about the Arizona Humane Society or Humane Society of Southern Arizona, please visit www.azhumane.org or www.hssaz.org, respectively.