According to JLL’s latest U.S. Data Center Report, the demand for data centers is at an all-time high, with a record-breaking first half of 2024. The report shows that the colocation data center market has doubled in size over the past four years and continues to grow rapidly.
JLL also highlights concerns about this rapid growth straining the already-taxed U.S. power grid and creating a potential talent shortage in the industry.
At mid-year, there are no signs of slowing down as vacancy rates hit a record low of 3% and occupancy has increased at an impressive compound annual growth rate of 30% since 2020. Asking rents have also seen significant increases ranging from 13% to 37%, depending on lease size.
Andy Cvengros, managing director and co-lead for U.S. data center markets at JLL, commented on this trend saying: “There seems to be no limit to how high demand for data centers will go.” He emphasized that almost all existing capacity is already leased up with pre-leasing currently standing at an impressive rate of 84%.
Cvengros continued by stating that they anticipate vacancy rates will continue trending towards zero over the next few years due to unmatched demand compared to any other property type. He stressed how crucial it is for companies planning their IT needs well in advance given this level of demand.
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