
The rapid development of AI, combined with the high demand for cloud services, has led to a 70% increase in data center construction throughout North America in the past six months – as well as an insatiable demand for the electricity needed to power them.
That’s according to a new study released this week by the largest commercial real estate services and investment firm in the world, the CBRE group.
The CBRE North America Data Center Trends H1 2024 study revealed a 3.9 gigawatts record jump since last August.
Typically housed in massive warehouse-like structures, data centers are commonly measured by the power they consume and, while "under-construction," by the power they are predicted to consume.
The Dallas-based real estate analytics firm found that in the first half of 2024, more than 500 megawatts of new data centers were installed in the biggest markets across the United States and Canada.
The top five data markets in the US – Northern Virginia, Dallas-Ft. Worth, Chicago, Phoenix, and Silicon Valley – have seen the most growth according to the research.
Other notable markets with expansive growth in the US include New York, Atlanta, Hillsboro, Oregon, and both Austin and San Antonio, Texas, where “under-construction activity more than quadrupled from a year ago to roughly 463.5 MW,” CBRE said.

The biggest factors driving growth can be attributed to public cloud providers and artificial intelligence companies and their continued need for computational power capacity.
“The adoption and utilization of digital applications will continue to drive data center demand due to more storage, computing and processing of data,” CBRE said.
Still, although “under-construction activity” is at an all-time record high in primary markets, CBRE found “the shortage of available power and longer lead times for electrical infrastructure continued to delay construction completions.”
It has become necessary for companies to evaluate a grid’s infrastructure when choosing a site to determine how much power will reach the site – and by when.
In fact, power availability is such a top priority for site selection that companies are being “forced to pre-lease space between two and four years ahead of completion to meet their future data center requirements.”
That’s in addition to major environmental concerns, such as the large amounts of water data centers use for advanced cooling technologies to keep servers and other components from overheating.
In the past five years, water consumption jumped by almost two-thirds in Virginia’s “data center alley,” a recent report by the Financial Times found.
The lack of suitable sites has led to bidding wars for the few that meet certain power and fiber requirements, CBRE reported, also driving up prices.
As expected, the cost to lease already established centers have also risen, with newer data centers demanding premium prices compared to older ones.
Total inventory of new data centers over the past twelve months have jumped to a record 23%, with 10% of that growth happening in the first half of 2024.
At the same time new inventory surged, data center vacancy rates plunged to a record low of 2.8%, CBRE said.
The Data Center Trend Report also noted that the strain on already established infrastructure to power new facilities is expected to make smaller markets, such as Northern Indiana, Idaho, Arkansas, and Kansas, more desirable for new builds.
Other secondary industries expected to experience growth due to data center demands include fiber network installation providers and electric cooperatives, which CBRE said have been expanding into the broadband market to “enhance internet access and improve grid management.”
The financial sector, which saw “digital realty” account for most of the investment activity so far in 2024, has also grown due to data center demand, specifically because of the large amounts of capital needed to lease sites, purchase land, buy equipment, and fund construction loans.
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