Data Center Vacancy Rate Hits Record Low in H1 2024 – CBRE

Overall data center vacancy rates for primary markets fell to a record low of 2.8% in the first half of 2024, from 3.3% in the year prior, with nearly 80% of more than 3.87 GW under construction in primary markets preleased, according to CBRE’s H1 2024 North America Data Center Trends report released Monday (August 19). 

While cloud providers continued to lease most of the available power capacity, artificial intelligence providers also accounted for a considerable amount of demand, CBRE says. Pricing continued to increase, but at a slower rate than last year, with a 7% bump in the average monthly asking rate for a 250- to 500-kilowatt requirement across primary markets in the first half of 2024.

As demand for high-power computing capability intensifies, a significant price gap has emerged between new data centers and legacy facilities, with many existing data centers lacking the infrastructure to support the demanding workloads required. Power availability remained a top consideration in data center site selection as well, CBRE says. 

In the first half of 2024, supply in primary markets increased 10% year over year, or 515 MW, and by 24%, or 1,100 MW, year over year according to the report. Although under-construction activity in primary markets scaled to a record high 3,872 MW – a 69% climb year over year – delays in construction completion persist due to a shortage of available power and longer lead times for electrical infrastructure, CBRE says. 

Related:AI Revolution Will Add Fuel to Data Center Boom, BlackRock Says

Atlanta saw a 76% year-over-year increase in under-construction activity, reaching 1,289.1 MW, and led all primary markets with a 26% year-over-year increase in pricing due to strong demand for AI providers, the report says. Austin and San Antonio more than quadrupled under-construction activity year over year to 463.5 MW. 

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