North America Data Center Trends H1 2026

• Average asking rates for 250-to-500-kW requirements across primary markets rose by 4.3% in H1, nearly double the 2.5% increase in H1 2025, reflecting growing pricing pressure across smaller deployment sizes.
• Mid-range requirements had the biggest pricing gains, with 3-to-10-MW requirements rising by 8.3% and 500-kW-to-3-MW requirements increasing by 7.9%.
• Asking rates for 10-plus-MW deployments across primary markets rose by 6.7% in H1, as pricing momentum shifted toward smaller requirement tiers with more available inventory.
• For the 10-plus-MW pricing tier, New York Tri-State asking rates increased by 19% in H1, followed by Atlanta (14.5%) and Chicago (9.7%).
• In contrast, pricing for 10-plus-MW requirements moderated in the most supply-constrained markets due to limited transaction activity. Silicon Valley and Hillsboro asking rates were unchanged in H1, while Northern Virginia rates increased by just 1.5%.
• Atlanta had the broadest pricing gains of any market, with rates rising across all four deployment tiers.

Figure 3: Average Asking Rental Rates by Requirement Size for Primary Markets

• Notable data center investment activity spanned debt financings, new investment platforms, joint ventures and acquisitions, reflecting sustained institutional investor confidence across the debt and equity markets. Data center investment sales totaled $1.7 billion in H1.
• Unprecedented demand and limited available capacity have driven investors to focus on construction financing and development equity, despite ongoing power and entitlement challenges.
• As new data center projects increase in scale, operators are engaging with a wider range of capital sources to secure financing, including private and public debt and equity markets.
• Investment in newly constructed data centers is increasing as they reach stabilization. Several investment firms have recently closed or are actively raising capital for evergreen data center funds, a notable shift from the closed-end funds that have historically dominated the sector.

Notable H1 2026 North American Capital Markets Activity

Debt & Financing

• Debt markets continue to lead data center financing activity, with public markets playing an important role in funding large-scale development projects.
• The high-yield bond market remains a viable option for financing large-scale development projects leased to non-investment-grade tenants. Issuers raised approximately $27.8 billion in financing through 12 high-yield bond issuances in H1. Meridian Arc priced $5.7 billion in high-yield bonds at a 6.25% yield in Q2, marking the largest AI-driven financing in the high-yield market to date. The issuance will fund the development of a 430-MW campus in Sullivan County, Indiana, that is 100% leased to Fluidstack.
• Project finance lenders continue to fund most of the construction loans for new data centers, with many providing ongoing financing to fund multiple projects for the largest and most active developers. For example, Related Digital and Blackstone secured $16 billion in construction financing for their Oracle-leased campus in Saline Township, Michigan.

Securitization Activity

• Issuance of single-asset, single-borrower commercial mortgage-backed securities (SASB CMBS) for data centers totaled $4.9 billion in H1, representing 9% of total SASB CMBS issuance across all property types, according to CBRE Capital Markets. Data center SASB CMBS issuance is expected to grow as development projects reach stabilization and seek long-term financing.
• Blackstone's QTS Data Centers has been among the most active SASB CMBS issuers, securing a $2.1 billion note in February to refinance three data centers in Virginia, Illinois and Georgia.
• The asset-backed securities (ABS) market remains a preferred financing source for operators with diversified platforms. For example, Switch raised approximately $768 million in April with an ABS issuance that added a data center facility in Reno, Nevada, to its portfolio and expanded the trust into an emerging market.

Investment Vehicles & Operating Platforms

• The limited availability of stabilized properties has moderated equity investor activity. As a result, investors are turning to platform investments and joint ventures to gain sector exposure.
• Capital formation has shifted toward open-end funds that benefit from the predictable cash flow generated by high-quality, low-risk properties with long lease terms. While private capital remains an active source for this funding, some institutional investors are also turning to the public markets. For example, Blackstone Digital Infrastructure Trust raised $1.75 billion with its U.S. initial public offering (IPO) in May.
• Platform investment and formation remain active, providing investors with access to development pipelines that are becoming increasingly difficult to assemble. KKR launched Helix Digital Infrastructure in June with over $10 billion in commitments to capitalize data centers, power generation and connectivity infrastructure. Additionally, funds affiliated with Blackstone acquired a 49% stake in Rowan Digital Infrastructure to support the platform's development pipeline.

Asset & Portfolio Transactions

• Several transactions for hyperscale assets in Northern Virginia were announced in H1, including Blue Owl Digital Infrastructure Trust's $860 million acquisition of a 72-MW facility in Gainesville, Virginia; Digital Realty's acquisition of Blackstone's interest in three assets totaling 288 MW that will stabilize at a gross asset value of $7.8 billion; and Realty Income's programmatic joint venture with Cloud Capital that plans to invest in three initial seed assets valued at over $6 billion.
• Year-to-date portfolio transactions include H5 Data Centers and Novacap's three-property acquisition from 365 Data Centers, and I Squared Capital's $225 million acquisition of a ten-facility portfolio from Cogent.

Figure 4: Largest Annual Increases in Under-Construction Totals for Primary Markets

Figure 5: Primary Market Net Absorption, Preleasing & Under Construction

• AI demand is driving significant investment in long- and medium-haul fiber infrastructure, creating new national fiber backbones that link major AI clusters to core network hubs. Over 20,000 route miles of new fiber projects were announced in 2026, with operators like Zayo, Lumen and BIG Fiber extending beyond traditional corridors to serve emerging AI markets and hyperscale workloads. Fiber connectivity is essential for linking new data centers to existing networks.
• Ongoing elevated M&A activity in H1 led to the creation of larger regional fiber platforms. Network consolidations involving Crown Castle, Everstream, Hunter Communications, Granite State Communications, and various municipal and regional providers will expand regional fiber footprints and connectivity for AI and hyperscale deployments.
• Network providers are accessing the capital markets for fiber infrastructure investment through securitizations, private credit facilities and asset-backed financing, reflecting investor confidence in fiber as a durable asset class. Companies such as Zayo, Uniti, BIG Fiber, LiveOak and Vero have secured financing for both national-scale network developments and regional fiber expansions.

Figure 6: Total Inventory vs. Under Construction by Primary Market, H1 2026

Figure 7: Total Inventory vs. Under Construction by Secondary Market, H1 2026

Local Opposition & Zoning Risk

Local opposition to new data center development has become a headwind for the sector. Site selection risk has fundamentally changed, and community engagement is now a development constraint on par with power procurement.

Tenant & Occupier Scrutiny

Data center owners are becoming more selective, prioritizing entities with robust credit profiles. As portfolios become overweighted with AI-focused tenants, operators are looking to mitigate financial risk and ensure long-term stability.

Power Density

Liquid-cooled retrofits to support new GPU rack power densities continue to increase in popularity. CPU servers once required 3-to-10 kW of power density per rack for air cooling. Today, 100-kW GPU servers can only be cooled by a closed-loop liquid-cooling system. As a result, power in existing air-cooled data centers is often concentrated in a smaller number of high-density GPU racks, leaving portions of the available floor space underutilized. This could lead to smaller land acreage requirements for future data centers, although this trend has yet to materialize.

Power Challenges

U.S. capacity demands are significantly outpacing utility transmission buildout. Upgrading high-voltage transmission infrastructure requires widening rights-of-way and securing new easements, which are difficult to quickly execute. Furthermore, developers are facing energization delays as new last-mile projects face persistent hurdles in permitting, planning and zoning.

West Texas Development

West Texas data center developments have progressed rapidly. Large-scale projects in Armstrong, Wilbarger, Haskell, Gray, Roberts, Ector and Reeves counties continued to reach energization milestones in H1. With the projects already approved in the construction pipeline, the region is expected to become one of the top five colocation data center markets in North America by 2028.

Pricing Trends

Data center pricing continues to rise, as record-low vacancy rates are forcing occupiers to compete in an increasingly competitive market. Strong demand and limited new data center completions in 2026 make a supply-shock unlikely this year.

Manufacturing Growth

Industrial demand from manufacturers and suppliers of mechanical, electrical and plumbing systems for data center fit-outs continues to climb. Manufacturing leasing activity for facilities of 100,000 sq. ft. and above rose by 28% year-over-year in Q1 2026, according to CBRE Research.  Additionally, manufacturers of data center and technology components accounted for the largest share of total manufacturing leasing in that period.

Cautious New-Market Growth

The outlook for emerging data center markets remains balanced. Development in these markets is being driven by demand from AI-training companies with limited operating histories, introducing credit risk for long-term leases. As new AI use cases emerge closer to end users and central business districts, demand is expected to shift toward 25-to-75-MW locations serving inference, enterprise AI and latency-sensitive workloads.

Triple-Net (NNN) Lease Structures

The traditional modified-gross-plus-electricity lease structure is evolving. Colocation operators are beginning to adopt NNN lease structures, where occupiers (depending on the requirement size) directly assume responsibility for taxes, common area maintenance and insurance.

Extended Ready-for-Service (RFS) Fit-Out Dates

Mechanical, electrical and plumbing equipment constraints are now impacting existing facilities in addition to new projects. As tenant demand for power density increases, RFS fit-out dates are expanding from weeks to several months. For air-cooled data centers requiring conversion to liquid cooling, delays can extend beyond six months.

"Take or Pay" Floors

"Take or pay" clauses, or minimum power utilization floors, are becoming increasingly common in the U.S., with minimum utilization levels ranging from 60% to 85% of allocated power. Historically, tenants paid electricity costs based on actual server-level power utilization. Under a "take or pay" structure, tenants may be required to pay for a minimum share of their reserved power capacity, even if their actual usage is below that level.

On-Site Power & Bring Your Own Power Solutions

Bridging power solutions are gaining traction nationwide, particularly when utility delays extend beyond contractual delivery timelines. Developers continue to weigh grid power against behind-the-meter solutions based on the specific requirements of end users and tenants.

Increasing Edge Demand

Long-anticipated demand for 2-to-20-MW urban infill sites recently gained momentum. While hyperscaler network infrastructure buildouts are driving current demand, enterprise applications, robotics and internet-of-things devices are expected to drive future demand.

Large Load Tariffs

A recent wave of state-level large load tariffs has the potential to hinder hyperscaler interest in future developments. The impact of Virginia's $0.011/kWh consumption tax, which took effect on July 1, is too early to assess. New Jersey, Ohio, Oregon, Wisconsin, Florida and Delaware have approved or enacted similar frameworks for imposing these tariffs.