Demand for data centers in North America is continuing to grow, according to JLL’s midyear North America Data Center Report.

Most markets in North America have doubled or tripled in size since 2020. Northern Virginia; Dallas, Texas; and Atlanta, Georgia saw the largest increase in capacity.

JLL anticipates that the imbalance in supply and demand will persist: “The combination of AI adoption, digital transformation initiatives, and cloud migration has created a perfect storm of demand that the industry simply cannot meet quickly enough, leading to the current supply crunch and making forward planning more crucial than ever for enterprises seeking data center capacity.”

Colocation vacancy rates have dropped to a record low 2.3 percent, down from last year’s record-breaking three percent.

A preview of a separate CBRE report covering the same time period estimates that vacancy rates are even lower, sitting at 1.6 percent.

There are currently 8GW worth of facilities in the construction pipeline, which is around 10 times the volume from five years ago. Although the percentage of pre-leased pipeline developments is lower than last year’s – 84 percent in 2024 compared with 73 percent in 2025 – it still remains high. The report added that “vacancy would likely remain below five percent through 2027,” and that “companies looking to expand their data center operations may be limited to preleasing in new developments.”

Head of JLL’s data center project development and services, Matt Landek, said: “The days of build-it-and-they-will-come are long gone. What we’re seeing now is ‘commit-before-it’s-built-or-you-won’t-get-in.’ This is fundamentally changing how companies approach their data center strategies.

“Enterprise users who once planned six to 12 months in advance are now securing capacity and their facilities and operations teams 18 to 24 months before their intended deployment dates, sometimes even earlier.”

North America absorbed 2.2GW in the first half of 2025, with virtually all absorption attributable to preleasing. Colocation demand continued to be concentrated in core markets like Northern Virginia and Dallas, which constituted 50 percent of all absorption in the first half of 2025.

Rent growth has slowed to three percent year-on-year, but the three-year CAGR currently sits at 12 percent. Commercial electricity rates have increased 30 percent since 2020, and 75 percent of all development activity is concentrated in low-cost electricity markets.

CBRE's report estimates that markets with low power costs such as Atlanta, Georgia; Charlotte-Raleigh, North Carolina; and Dallas-Forth Worth, Austin, and San Antonio, Texas will see accelerated supply growth as development shifts to areas with faster power access.

The data center industry has seen a 161 percent growth in market cap from 2019 to 2025, two percent behind the industrial sector. Data centers have become favored as a real estate asset class because of “insatiable tenant demand, limited supply and rising rents,” with an expanding lender pool including commercial real estate banks, project finance lenders, life companies, and debt funds.

Debt markets also grew, with asset-backed security (ABS) and single-asset single-borrower loan activity increasing for the third consecutive year.

JLL recorded 14 ABS deals in the first half of 2025, totaling $7.7bn – this includes TierPoint’s $500m securitization deal in April – which was higher than the 11 deals in the same period last year. Four SASB deals worth $7.7bn were also inked in the first half of 2025.

Update: This article has been modified to include analysis from a preview of CBRE's North America Data Center Trends H1 2025 report.