Atlanta Ranks Second for Data Center Leasing Activity in 2021

Driven by demand from large cloud service providers and social media companies, data center leasing activity in Metro Atlanta set new records in 2021, according to a new report from CBRE.

Metro Atlanta had a record-70.42 MW of data center absorption in 2021, a majority of which came during the second half of the year when 55.5 MW was absorbed. Last year’s total absorption represented a 287.3% increase from 2020, when just 18.2 MW of data center space was absorbed during the year. The market’s absorption – a measure of net leasing activity – jumped from seventh to second year-over-year among the 17 data center markets that CBRE tracks.

Supply continued to be an inhibitor for growth in the Atlanta data center market with vacancy decreasing from 14.5% (23.8 MW) to a record-low 8.3% (19.0 MW) year-over-year. However, this should be alleviated by the 160.5 MW currently under construction.

“In 2021, we saw an explosion of data center activity in Atlanta, and 2022 shows no sign of activity slowing down,” said Tim Huffman, Executive Vice President with CBRE’s Data Center Solutions in Atlanta. “Expansions and new projects by hyperscale users and colocation operators are driving new growth. The west side of town in Douglas County continues to see projects landing there and the south side of town has quickly become the prime emerging growth submarket.”

National Trends

CBRE’s latest North American Data Center Trends Report shows that there was 493.4 megawatts (MW) of net absorption in the seven primary U.S. data center markets in 2021, a 31% increase over 2019’s then-record level, and up 50% from 2020.

Despite a 17% year-over-year increase in primary-market inventory, vacancy fell to just 7.2%. Occupiers in need of data center capacity in markets with low vacancy should see more options in 2022 with 727.6 MW of facilities under construction. However, 44% of this space has been preleased.

“We expect continued strong data center demand from cloud service providers and social media companies in 2022, particularly for large-scale, single-tenant facilities, as these firms race to build out metaverse and other digital communities,” said Pat Lynch, Executive Managing Director, Data Center Solutions, CBRE. “The continued adoption of autonomous vehicles, 5G infrastructure, and blockchain technology will also further fuel the data center real estate market in 2022 and beyond.”

Top U.S. Data Center Markets

Northern Virginia remained the most active data center market with net absorption of 303.3 MW in 2021 – more than four times that of Atlanta, the second-most-active market.

Top 10 Most Active Markets

Market	2021 Net Absorption	Market	2021 Net Absorption
Northern Virginia	303.3 MW	Silicon Valley	23.3 MW
Atlanta	70.4 MW	Hillsboro	21.2
Phoenix	29.8 MW	New York Tri-State	10.5 MW
Dallas/Ft. Worth	28.6 MW	Denver	8.0 MW
Chicago	27.4 MW	Southern California	7.7 MW

Looking ahead, Northern Virginia has the largest under-construction pipeline, at 239 MW. Other markets with significant construction under way include Hillsboro, Oregon (234.8 MW); Atlanta (160.5 MW); Silicon Valley (94.6 MW); Phoenix (85.5 MW); and Dallas/Ft. Worth (75.8 MW). 

To download the report, click here.

*The seven primary U.S. data center markets are Northern Virginia, Dallas, Silicon Valley, Chicago, Phoenix, New York Tri-State and Atlanta.