Data Center Construction Quadruples in Central Texas as Cloud and Artificial Intelligence Providers Drive Demand

Austin and San Antonio’s combined under-construction activity more than quadrupled from a year ago to 463.5 megawatts (MW), according to CBRE’s latest North American Data Center Trend Report.

Central Texas now has the most data center space under construction of all secondary markets tracked by CBRE, and the fourth most among all markets. If the region’s in-progress construction was completed tomorrow, the combined Austin/San Antonio market would become the second largest data center market in the country, trailing only behind Northern Virginia. Most of the region’s growth is primarily occurring both north and south of the Austin metropolitan area due to land availability.

Since H2 2023, 375.5 MW were added to Central Texas’s construction pipeline, more than Atlanta’s entire existing inventory (310 MW) and more than twice its own existing inventory (189.7 MW). The new construction underway will do little to help relieve the market’s record-low, 1.8% vacancy rate, being that 96% of under-construction capacity is preleased. Central Texas’s vacancy rate is second lowest among secondary markets and fourth lowest among all markets tracked by CBRE.

In North America, data center construction continues to reach new highs as developers race to meet demand. There was 3,871.8 MW under construction (an increase of 69.2% from a year ago) in the first half of 2024, of which nearly 80% (3,056.4 MW) had been preleased. A shortage of available power and longer lead times for new electrical infrastructure continue to delay completions.

“The trend has been consistent over the past two years: Demand for data center capacity far exceeds supply, which continues to drive up pricing in a material way,” said Pat Lynch, Executive Managing Director and Global Head of CBRE Data Center Solutions. “Based on the preleasing numbers in this report and forecasts for demand, we expect to see this imbalance continue for several more quarters.”

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