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U.S. Data Center Demand Appears to Have “No Ceiling”
Demand for data centers is at an all-time high, demonstrated by a record-breaking first half of 2024, JLL reported. The firm’s new U.S. Data Center Report – Midyear 2024 said the colocation data center market has doubled in size over the past four years amid growing concerns that the rapid growth is straining an already-taxed U.S. power grid and an impending talent cliff.
Demand shows no sign of slowing down at mid-year, according to JLL. Vacancy set a record low of 3%, and occupancy has increased at a 30% compound annual growth rate since 2020. Asking rents increased between 13% and 37% year-over-year, depending on the lease size.
“There appears to be no ceiling for how high this data center demand is going to reach,” said Andy Cvengros, managing director, co-lead of U.S. data center markets, JLL. “Nearly all existing data center capacity is leased up, and pre-leasing currently stands at 84%.”
He continued, “We anticipate vacancy will continue to trend to 0% over the next few years. This level of demand is currently unmatched by any other property type, and I cannot stress enough the importance of planning and being proactive about your IT needs years in advance.”
- ◦Development
