Data Center Demand Exceeds Expectations in First Half: JLL

(Illustration: Brett Sayles via pexels.com)

Data center demand reached yet another high in the first half of 2026 with 25 gigawatts of absorption–double the level from a year ago and five times that of 2024–according to JLL, Chicago.

JLL’s North America Data Center Report reveals “unprecedented” data center growth driven by hyperscalers, neoclouds and AI companies.

But it noted that community acceptance remains challenging. While 79% of Americans support U.S. leadership in artificial intelligence, only 14% support data center development in their community, a 65-point support gap that threatens to constrain the infrastructure buildout required to maintain AI competitiveness.

“We’re witnessing demand levels that continue to exceed even industry insiders’ expectations,” said Andy Cvengros, executive managing director and co-lead of U.S. Data Center Markets with JLL. “The market absorbed 25 gigawatts in just six months, driven by hyperscalers, neoclouds and pure-play AI companies competing aggressively for scarce capacity. But the real story is how community acceptance–or lack thereof–has emerged as the defining challenge for this next phase of growth.”

“The industry and communities need to come together to find a path forward that benefits everyone,” Cvengros added.

With vacancy sustained at 1% for the third consecutive year despite unprecedented construction activity, North America now has 66 GW under construction, 95% of which is pre-committed. Texas has cemented its position as the state for data centers, with 26 GW of existing and under-construction capacity, followed by Virginia at 13 GW, while frontier markets now account for 77% of all capacity under development.

Data center financing liquidity remains robust across all credit tiers, with capital markets activity reaching unprecedented levels, the report said. Construction activity is expected to drive more than $700 billion in permanent debt originations over the next 30 months, reflecting investor confidence in the sector’s long-term fundamentals.

Investment-grade hyperscaler construction loans continue to command the most efficient pricing, while non-credit tenant deals are evaluated ad hoc with spreads approximately 200-300 basis points wider. Commercial mortgage-backed securities and asset-backed security data center volume combined for $17 billion in the first half of 2026, a 29% increase from the previous year. “The capital markets have adapted remarkably well to support this unprecedented buildout,” noted Carl Beardsley, senior managing director and head of data center capital markets at JLL. “We’re seeing strong liquidity across the entire credit spectrum, from investment-grade hyperscalers to non-credit deals. The AI-driven construction cycle is fueling sustained debt demand, with high-yield bond issuance reaching $32 billion in the first half alone. Capital providers recognize the structural nature of this demand and are pricing accordingly.”