CBRE: Data Centers See Strong 2024

(Image courtesy of CBRE)

CBRE, Dallas, reported supply in primary data center markets increased by 34% year-over-year in 2024, significantly more than the 26% increase in 2023.

The primary markets also had a record 6,350 MW under construction at the end of 2024, more than double what was under construction at the end of last year. The increase was driven by robust demand and some construction timelines that had been extended due to power constraints and supply chain delays.

“We saw unprecedented demand last year in the North American data center market fueled in part by AI and digital services–which drive a need for modern data centers–and investment from hyperscalers and developers,” said Pat Lynch, Executive Managing Director and Global Head of CBRE Data Center Solutions. “However, the risk of oversupply in the near term is minimal because of extended timelines for power delivery and wait times of 36 months or more for electrical equipment such as transformers, generators and switchgear.”

The vacancy rate was at a record low 1.9% at the end of 2024.

The top primary market for net absorption was Atlanta, with 705.8 megawatts. Northern Virginia–usually the leader–recorded 451.7 megawatts. Atlanta’s topping the list was the first time any market had passed Northern Virginia in annual net absorption since CBRE began tracking the sector.

Other markets are up-and-coming in the space, including Charlotte, N.C., Northern Louisiana and Indiana.

The average monthly ask for a 250-to-500 kW requirement across primary markets rose 12.6% year-over-year to $184.06 per kW.

There was a significant increase in investment activity in the second half of 2024, and annual sales volume exceeded $6.5 billion.