Intelligent Investment

Data Center Asking Rents Surged as Much as 54% Over Eight Months

March 28, 2024 2 Minute Read



Average asking rental rates in key North American data center markets increased by 20% to 54% over the last eight months. This robust rent growth in markets such as Chicago, Dallas-Ft. Worth, Northern Virginia, Phoenix and Silicon Valley is driven by strong demand that is exceeding supply increases and has pushed rates close to their peak highs of the 2010-2011 period. Data centers are integral to the digital economy, particularly with the rapid growth of AI and data storage and processing.

Market Dynamics

New capital sources and investment were projected to push down rental rates. However, power constraints are delaying new construction and are the biggest impediment to expanded data center supply. This has caused leasing competition for existing data centers to intensify and rents to remain elevated. Occupiers now typically pre-lease space 18 to 36 months in advance, markedly earlier than the six-to-12 months that was previously the norm.

Vacancy and Construction Stats

  • An all-time high of 3,077.8 MW is under construction in primary markets, up 46% since H1 2023.
  • Vacancy rates have fallen since 2021 despite booming construction. In H2 2023, vacancy hit record lows in New York Tri-State, Seattle, Central Washington and Chicago.

Figure 1: Vacancy Rates, H1 2021-H2 2023


Source: CBRE Research, H1 2021 to H2 2023.

Figure 2: Average Rental Rate, H1 2021-Q1 2024


Note: Figures and data from H1 2021 to H2 2023 reflect 5-10 MW pricing. Q1 2024 data reflects 3-10+ MW pricing.
Source: CBRE Research, H1 2021 to Q1 2024. Q1-2024 Data is as of Feburary 29, 2024.

Asking Rent Comparison

Q1 20241  vs. H1 2023 for 3 to 10+ MW requirements:

  • Silicon Valley: $170 to $200 vs. $115 to $125 (+54%)
  • Northern Virginia: $135 to $160 vs. $90 to $110 (+47.5%)
  • Chicago: $125 to $140 vs. $85 to $95 (+47%)
  • Dallas-Ft. Worth: $125 to $135 vs. $95 to $115 (+29%)
  • Phoenix: $130 to $170 vs. $120 to $130 (+20%)


These questions are key to achieving better balance between supply and demand:

  • How can supply growth be accelerated to meet demand? What role will high-growth emerging markets play in this?
  • Will alternative/off-the-grid power solutions enable developers to accelerate construction timelines?
  • How can occupiers improve their planning processes to secure data center space on a timelier basis?
  • Will new transmission and distribution help unlock power supply in constrained markets? If so, how much capital and time is required to improve the energy grid for long-term data center development?

1 Data as of February 29, 2024

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