Charlotte/Raleigh

Colocation Insights

• Operators and developers are evaluating new development because large blocks of existing inventory are very scarce. 
• Suitable sites for data center development are scarce due to lack of entitled developable land. Entitling land for new data center development in these regions is untested. Entitlement processes in surrounding counties has been relatively easy.
• Rural areas within a one-hour drive of regional metros have more power availability. Power is more available westward, toward Charlotte (legacy Duke Power territory), than eastward, toward Raleigh (legacy Progress Energy). This is due to the larger transmission network covering Charlotte, Winston-Salem and Greensboro.
• Rural sites with access to power often have fiber, water and sewer availability challenges. 

Market Trends

• Developers are scouting locations for hyperscale facility development, before demand increases in the greater Charlotte metro area.
• Tenant demand has increased in Raleigh-Durham and the Research Triangle Park area. Power and site availability make new development very challenging, pushing tenants to grow within their current facilities or lease the slight colocation inventory available.
• Industrial, residential and solar developers have already purchased and developed many sites, decreasing inventory.

Notable Activity

• Microsoft acquired 450 acres of land in Catawba County (near Charlotte) in Q4 2022. In Q1 2023, it acquired an additional 238 acres, for a total of 688 acres across four sites.
• “Project Cobra” is a proposed $1 billion data center project in York, SC (near Charlotte) that is currently pursuing tax incentives.
• TierPoint plans to add more power and cooling to their Research Triangle Park data center.

Figure 1: Historical Market Information

Source: CBRE Research, CBRE Data Center Solutions, H1 2023.

Figure 2: Historical Supply and Demand

Source: CBRE Research, CBRE Data Center Solutions, H1 2023.

Figure 3: % of Total Secondary Market Inventory

Source: CBRE Research, CBRE Data Center Solutions, H1 2023.

Figure 4: Market Fuel Mix

Source: Duke Energy Carolina.

Figure 5: Average Asking Rates

Source: CBRE Research, CBRE Data Center Solutions, H1 2023.