They're not really server colos (except for some wall street stuff, but even that is in Northern NJ now). The Manhattan facilities are mainly carrier interconnects between carriers and for equipment to provide leased circuits to businesses, a lot of which serve customers in Manhattan or grew up around telephone infrastructure to serve offices in Manhattan.

Big scale server colos are usually in WA/OR (cheap power), SFBA (fiber, tech companies), TX (cheap land, sort of cheap power, or at least available power), or DC metro (sort of cheap power, cheap land in some areas, lots of government users).

you're historically right about this, but wrong on a bunch of other levels. there is a few million square feet of real server colo in 111 8th ave, and at least an order of magnitude more than that combined across the other spaces mentioned.

The reason they locate there (as with in London) if to reduce the latency for financial trading programs. It may not sound like a lot, but when you have an automatic trading application processing billions of trades a year it can make a huge difference to receive the information a little earlier, and place your orders that little bit quicker.

As a side note, Internap's LGA11 datecentre facility on 75 Broad Street is currently being evacuated, and most of the fuel reserves are submerged below water...