The statistics on the growth and expansion of data centers in the U.S. are mind-boggling, and they are attracting a broader range of major investors eager to get a foot in the door while there is still space for new entrants.
According to CBRE’s recent report on North America data center trends in 1H 2025, demand will only intensify. The search for space from hyperscale and AI occupiers has driven vacancy in primary markets to a record low of 1.6%. “Power availability and infrastructure delivery timelines remained the most decisive factors shaping site selection, leasing activity and pricing across all major U.S. markets,” the report stated.
In the first six months of 2025, data centers produced a record 8,155 megawatts (MW) to supply primary markets. That is more than double the capacity of a large nuclear power station, which typically generates around 1,000 to 4,000 MW, and sufficient to power more than six million homes or several large metropolitan areas. But experts say more is still needed.
Prices have risen by 2.5% since 2H 2024 for 250-400 kilowatt (KW) facilities, while the cost of larger deployments of 10 MW or more spiked by an average of 13.8% in Northern Virginia and up to 19% in Silicon Valley. “These pricing increases were driven by tight supply of contiguous power blocks, elevated build-out costs and fierce competition from cloud and AI-related tenants for high-density infrastructure,” CBRE commented.
With 74.3% of all under-construction capacity already committed, preleasing was strong as cloud and AI providers struggled to secure adequate space amid limited power and land availability.
Indeed, underway capacity fell in primary markets to 5,242.5 MW in 1H 2025 from its peak in 2H 2024 of 6,350 MW.
Once again, Northern Virginia ranked as the nation’s largest data center market with an inventory of 3,480.1 MW, up 869 MW year-over-year, a vacancy rate of just 0.7% and a rental rate of $190-$235 per KW. The region also had 2,078.2 MW under construction. Atlanta came in a distant second with 1,279.4 MW, up 969.4 from the previous year, a vacancy rate of 1.9%, rental rates of $160-$180 per KW and 1891.9 MW under construction.
Other notable primary markets were Dallas-Fort Worth, with the lowest rental rates at $140-$175 per KW, Chicago, Phoenix, Silicon Valley, with the highest rentals at $175-$275 per KW, Hillsboro, OR and the New York Tri-State area, with rentals of $180-$225 per KW.
Up-and-coming secondary markets include Southern California, Austin, Central Washington, Seattle, Houston, Denver, Minneapolis and Charlotte, according to CBRE.
“The pricing gap between smaller and larger deployments continued to widen, as AI and hyperscale workloads drove sustained demand for future-proofed capacity at scale,” the report noted.
Remarkably, despite strong demand, investment in data centers in North America slumped by more than half to less than $1 billion from 1H 2024 to 1H 2025. CBRE attributed this to delayed decision-making by investors caused by economic uncertainty, geopolitical conflicts and power supply challenges. However, the CRE firm projects a rebound in the second half as delayed deals forecast to finally close and new investment opportunities arise.
“Robust development activity will continue to drive demand for joint-venture equity and forward commitments for new data center builds,” it noted.
CBRE also pointed to the sector’s appeal as an alternative asset that will attract a wider range of investors, including those who normally invest in traditional CRE sectors like net-lease and industrial.
There are a number of indicators of the growing interest in data center investment by capital markets. CMBS issued for data centers hit a record high of some $4.5 billion in 1Q 2025, including a $2.4 billion deal led by Switch and a $2.05 billion deal led by QTS. Around $7 billion in CoreWeave-leased financings has enabled recent build-to-suit construction projects, while the Stargate project established by OpenAI, Oracle and Softbank will fund up to $500 billion in AI infrastructure. Other significant investments were announced by Principal, Blue Owl Capital, DigitalBridge and La Caisee.
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