The Pacific Northwest Data Center Market is facing considerable expansion, as the Portland suburb of Hillsboro has emerged as a significant niche for hyperscale and enterprise facilities. The adoption of cloud-based services, the emergence of 5G networks, and the high demand for streaming online entertainment content are some of the most significant factors accelerating the growth of the Data Center Market in Oregon.
Cushman & Wakefield evaluated data center markets across the globe within 13 categories, including fiber connectivity, market size, cloud availability, and more, to determine the top overall needs and the top performers in each of the 13 categories. According to the firm’s research, Oregon is positioned second after Northern Virginia, followed by Singapore, where Direct Line has a strong presence with strategically-located offices.
Why is Oregon the best location for Data Centers in the Pacific Northwest?
According to a JLL Data Center Outlook report released in 2021, “With Hillsboro leading the charge, the Pacific Northwest is on track for a potential record year as absorption exceeds all previously forecasted mid-year absorption numbers.”
The primary reasons the Hillsboro market grew 84 percent in 2021 are its business-friendly environment, affordable power and renewable energy options, diverse metro, and long-haul connectivity to major cities and tech hubs such as Los Angeles, Seattle, and Silicon Valley. Oregon also has one of the most robust network points in the Pacific Northwest, including one of the most advanced and comprehensive trans-Pacific fiber networks in the U.S., plus complete local connectivity. It also has more favorable tax incentives than states such as California or Washington.
Although Portland is considered a secondary data center market (especially compared to nearby large primary markets in Seattle and Northern California), Data Center Frontier states some reasons why data center users increasingly find the market attractive.
- Growing Economy: The Portland economy continues to increase, with a 3.3% annual employment growth.
- Growing Technology Sector: Much of Portland’s economy comes from high-tech manufacturing and IT jobs. The Hillsboro sub-market also has business clusters of firms specializing in advanced manufacturing and biotechnology.
- Heavy Data Center Tax Incentives: Portland’s data center tax is the 2nd lowest in the United States. The tax incentives are available in Portland’s suburban “enterprise zones.” Oregon does not have a sales tax.
- Lower Seismic Threat: Compared to other West Coast markets, the seismic threat in the greater Portland area is relatively low.
- Access to Subsea Cables: Portland data centers have access to several trans-Pacific subsea cables, an option not available in competing markets in interior U.S. states. An ultra-high count fiber ring joins all the major local data centers and businesses. It is a cross-connect for FASTER, TPE, TGN, Hawaiki, and New Cross Pacific that reduces latency to high-value Asia-Pacific markets.
Why is Hillsboro important for Direct Line?
Hillsboro also offers proximity to international subsea cable networks that reduce latency between the U.S. and high-growth markets in the Asia-Pacific region. This allows our global expansion works efficiently through the Asia Pacific Region, with our North and South Asia Hubs in Hong Kong and Singapore. Our knowledge of the local markets within the APAC is twinned with our long-spanning track record of high-profile success with our global clients and partners.
