The demand for data storage in Phoenix is rising, driven by cloud services and AI, with developers flocking to the area due to available land, power, and lower costs. In the first half of 2024, 337 megawatts of capacity were absorbed, though this was lower than late 2023 due to limited inventory. Currently, only 20 megawatts of capacity remain available, and 80% of the 757 megawatts under construction are pre-leased. Phoenix ranks second nationwide for both planned and under-construction data center capacity. Major cloud providers such as Microsoft, Oracle, and Amazon have committed to the region, which benefits from tax incentives and favorable zoning. Developers like Microsoft and Tract are expanding rapidly, with a $20 billion data center project planned in Buckeye.
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A full-service lease is a lease that has one, all-inclusive rental rate which includes both the base lease rate and the operating expenses combined into one figure.
A modified gross lease is a lease where the tenant pays base rent at the lease’s inception, but it takes on a proportional share of some of the other costs associated with the property as well, such as property taxes, utilities, insurance, and maintenance.
A triple net lease is a lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property, including real estate taxes, building insurance, and maintenance. These expenses are in addition to the cost of rent and utilities.
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