Available space continues to plummet
Strong data center demand is being reflected in record low vacancy rates in primary North American markets, according to a CBRE report.
These markets include: Northern Virginia; Atlanta, Georgia; Dallas-Fort Worth, Texas; Chicago, Illinois; Phoenix, Arizona; Silicon Valley, California; Hillsboro, Oregon; and the New York Tri-State area.
The real estate consultancy’s North America Data Center Trends H1 2025 report, published on September 8, noted that the rate had dropped to 1.6 percent, 0.3 percent lower than the previous historic low of 1.9 percent as reflected in CBRE’s H2 2024 report.
Rates in the region’s primary markets have been continuously dropping for a while – CBRE’s H1 2024 report listed a 2.8 percent vacancy rate as a record low, itself down from 3.3 percent in H1 2023.
Primary market supply now totals 8.155GW, a 17.6 percent increase from the previous half and a 43.4 percent increase year-on-year.
Under-construction capacity has fallen down to 5,242.5MW from H2 2024’s historic peak of 6,350MW, but this is 61.5 percent above H2 2023’s total of 3,245.2MW. Moreover, 74.3 percent of H1 2025’s capacity has already been committed by way of preleasing activity.
Average asking rates for a 250 to 500 kW rack requirement have increased by 2.5 percent since the last half, and rates for deployments over 10MW have increased by up to 19 percent. The report attributes this to hyperscaler demand, limited power availability, and elevated construction costs.
Rates in Silicon Valley saw the greatest growth among core markets, with facilities offering more than 10MW of capacity seeing asking rates increase by 19 percent.
Moreover, the pricing gap between smaller and larger deployments continues to widen due to the growth of AI and hyperscaler demand.
Northern Virginia continues to be the leading market in the region, with an 80 percent increase in under-construction capacity to 2,078.2MW and 538.6MW of net absorption. The market currently offers 3,480.1MW worth of capacity in inventory.
Investment activity, however, has slowed, falling by more than half year-on-year to less than $1bn. CBRE attributes this to delayed activity as a result of economic uncertainty, geopolitical concerns, and power supply.
The latter issue has also led to growth in markets with faster power access, with utilities also seeking contributions from developers and occupiers by way of capital expenditure to fund power generation and transmission infrastructure. This includes markets including Atlanta, Georgia; Charlotte-Raleigh, North Carolina; and Dallas-Fort Worth, Austin, and San Antonio in Texas.
CBRE’s 2025 Global Data Center Investor Intentions Survey, which was conducted early in the year, had previously concluded that investor risk appetite for data centers remained high, with most respondents planning to increase their data center investments.
Source: DCD
