Data Center Construction Hits New Heights By Martin Vilaboy 46 CHANNELVISION | MARCH - APRIL 2025 The North American data center sector doubled the amount of supply under construction in 2024 over the previous year to a record 6,350.1 megawatts (MW) – a 12-fold increase from the 456.8 MW under construction in 2020. The surge highlights the growing need for data centers that can meet the power demands of AI companies, according to CBRE’s latest “North American Data Center Trend Report.” Last year, the eight primary North American data center markets (Northern Virginia, Dallas-Fort Worth, Silicon Valley, Chicago, Phoenix, New York Tri-State, Atlanta and Hillsboro) saw a significant uptick in completed construction, with total supply reaching 6,922.6 MW, a 34 percent year-over-year increase. This growth outpaced the 26 percent increase in new supply in 2023. Despite the boom in construction, the North American data center sector still is struggling to meet current demand, largely due to extended construction timelines driven by power constraints and supply chain delays, said the CBRE report. Meanwhile, the average vacancy rate in primary markets reached a record low of 1.9 percent in 2024. Vacancy rates decreased across all primary markets for the first time since CBRE started tracking the data center sector in 2013. In tandem, the national average lease rate rose to a record $184.06 per kW/month, up 12.6 percent from a year ago, marking the third straight year of double-digit percentage increases. “We saw unprecedented demand last year in the North American data center market fueled in part by AI and digital services – which drive a need for modern data centers – and investment from hyperscalers and developers,” said Pat Lynch, executive managing director and global head of CBRE Data Center Solutions. “However, the risk of oversupply in the near term is minimal because of CORE COMMUNICATIONS 10 Largest North American Data Center Market by Construction Activity Market H2 2024 Under Construction H2 2024 Total Inventory Northern Virginia 2,672.5 MW 2,930.1 MW Atlanta 2,159.3 MW 1,000.4 MW Dallas-Fort Worth 605.6 MW 591.0 MW Austin/San Antonio 463.5 MW 191.1 MW Chicago 266.0 MW 640.9 MW Phoenix 176.0 MW 602.8 MW Hillsboro 160.8 MW 499.0 MW Silicon Valley 167.8 MW 468.4 MW New York Tri State 142.1 MW 190.0 MW Montreal 11.0 MW 214.5 MW Source: CRBE Average Asking Rental Rate with Y-o-Y % Change for Primary Markets Source: CBRE 1.2% 0.5% 14.5% 18.6% 12.6% -3.2% -4.0% -4.4% -1.9% -6.1% -0.4% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2013 2023 2024 100 120 140 160 180 200 220 250-500 kw Pricing ($) 31% 30% 28% Secure Service Edge (SSE) Secure Web Gateway (SWG) Cloud Access Security Broker (CASB) Respondents were actively using t Source: Xalient Low Average High Avg % Change
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