North America Data Center Report Year-end 2024

At the end of 2024, colocation vacancy in North America declined to a new all-time low of 2.6% amid instable demand and despite several years of record construction levels. Vacant and immediately available data center space is incredibly limited. Across North America there are very few blocks available larger than 5 MW.

Any second-generation space that becomes available is re-leased within weeks. Nearly 6.5 GW is under construction, of which 72% is preleased. Tenants looking to lease any sizable amount of data center capacity must wait 24 months on average. Limited availability is constraining sector growth.

The data center sector remains among the most favored real estate asset classes due to insatiable tenant demand, limited supply and rising rents. There was strong investor appetite throughout 2024 across various deal profiles. Cash flow buyers were looking to add data centers to their portfolios and operators were looking for value-add opportunities with immediate power and capacity in place.

Investors continue to focus on core markets. While land values are higher and power lead times are longer, core markets continue to be perceived as the safest investments that can accommodate cloud, AI, and enterprise workloads.

Supply chains for data center equipment continue to be challenged. The COVID-19 pandemic was a stark reminder of the fragility inherent in global supply chains. And while the issues specific to the pandemic have subsided, today we are met with a new set of challenges.

One of the key challenges with equipment lead times is the increasing complexity of global networks. Mitigating geopolitical and trade uncertainties is an increasing risk. Client orders are also continually evolving due to the pace to technological change. And the exponential growth of data center development is pushing manufacturers to the limits of their production capacities.