The Phoenix region – one of three points-of-entry into Latin America together with Dallas and Miami – is suffering from a lack of options for wholesale data center customers, according to the latest Grubb &Ellis market update.

While it has been "one of the hottest data center markets in the country", a big challenge facing both retail and wholesale colo providers in the region is a relatively long time frame for power delivery, G&E’s Pete Bolton and David Horowitz wrote.

At the moment, the only two providers capable of delivering more than 500kW of data center capacity to a client are i/o Data Centers and Digital Realty Trust. This makes for bullish wholesale prices, which according to the real-estate consultancy, range from US$165 to $195 per 1kW.

Learn more about the Phoenix data center market and meet all key industry players in the region this week at the DatacenterDynamics conference in downtown Phoenix. The event takes place on Wednesday, 13 April. Click here for details.

Digital has started building out Phase II of its data center in neighboring Chandler, planning to complete first two 1.1MW pods in June. This will make for a total of 12 pods at the Chandler campus.

i/o is also building out the second phase of a Phoenix-market data center. The company is adding 24MW of power to the facility.

Most demand for data center space in Phoenix is generated outside of the state. Key demand drivers are stability of the electrical grid, relative absence of natural disasters, rich fiber infrastructure and low electricity rates.

Rates for data centers using 3MW or more range from $0.65 to $0.75 per 1kWh. Data center users with loads under 3MW pay between $0.72 and $0.85 per 1kWh.

Local utilities’ generation-fuel portfolio is 35% coal, 35% natural gas and 30% nuclear.