North American data center leasing reached record levels in 2021, fueled by demand from large cloud service providers and social media companies, CBRE said this week.
While the Greater Seattle region wasn't among the nation’s 10 most-active markets last year, it did add 3.5 MW of data center capacity and now totals 140.5 MW in inventory, which makes it the 11th-largest data center market in the U.S., CBRE said. The region recorded 5.8 MW in net leasing activity in 2021 and is building an additional 22 MW of capacity.
“The Puget Sound region ranked as the second-best market for tech talent in North America in 2021 and has seen extraordinary commitments for future job growth by large technology companies, which will in turn drive demand for data center space,” Jane Blair, first vice president with CBRE’s Data Center Solutions group in Seattle, said in a news release. “The higher connectivity requirements of new technology in urban areas, like what’s being rolled out in AI, facial recognition software, animation, gaming, sports, and 8k TVs, among others, will further increase the need for data centers in the region.”
There were 493.4 megawatts (MW) of net absorption in the seven primary U.S. data center markets in 2021, a 31 percent increase over 2019’s then-record level, and up 50 percent from 2020, CBRE’s latest North American Data Center Trends Report showed. The seven primary U.S. data center markets are Northern Virginia, Dallas, Silicon Valley, Chicago, Phoenix, New York Tri-State, and Atlanta.
There was a 17 percent year-over-year increase in primary-market inventory last year, but vacancy fell to 7.2 percent, CBRE said. An additional 727.6 MW of facilities are under construction, but 44 percent of the space has been preleased.
“We expect continued strong data center demand from cloud service providers and social media companies in 2022 as these firms race to build out their digital infrastructure to support demand for cloud services and metaverse and other digital communities,” Pat Lynch, executive managing director-Data Center Solutions at CBRE, said in the release. “We also anticipate increased appetite for highly connected colocation space from enterprise users, and pricing increases and longer lead times for available capacity in certain markets due to power constraints and supply chain challenges.”