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Internet Traffic Leading a Data Center Boom/Bust

Data center space has been one of the few bright spots in real estate of late, but some fear its peak has passed.

 By Ainsley Jones | Posted Jul 8, 2011
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Data center space has been one of the few bright spots in real estate of late, but some fear its peak has passed as large companies like Apple and  Facebook have started building their own custom facilities to avoid leasing costs. Over the last 18 months, rates for tenants that rent entire data centers or large parts of them have fallen 20 percent in the San Francisco Bay area, reports The Wall Street Journal.

While other markets haven't seen such a steep decline, a number of data center developers, that have followed the "if you build it, they will come" theory, could get burned as supply starts to meet demand. However, Internet traffic is only expected to increase, so developers could end up with the last, if not the latest, laugh.

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