Hillsboro’s Data Center Inventory Grows 334% Since 2020

With 280.8 megawatts (MW) of product under construction at the end of 2023, Hillsboro is set to more than double its current inventory, according to CBRE’s latest North American Data Center Trend Report.

In 2023, average asking prices in Hillsboro rose to $147.5 per kW/month from $137.86 per kW/month. While absorption hit a four-year high in H2 2023 with 93.3 MW, vacancy decreased to a four-year low, hovering at 2.5% at the end of the year. Hillsboro’s data center inventory makes up 5.1% of the total primary market inventory*

“Hillsboro’s data center market grew in 2023 and became one of the most attractive markets in the U.S., despite power constraints,” said Haakon Weinstein, a Senior Associate with CBRE Data Center Solutions in Portland. “While the construction pipeline strengthened in the back half of the year, in part due to strong activity in Umatilla, almost all of the space has been preleased.”

Hillsboro’s inventory has grown 334% since 2020, totaling to 262.4 MW at the end of 2023. The elevated construction activity in the market has attributed to this rapid growth, though nearly all (93.4%) of the space under construction has been preleased. Notably, Aligned Data Centers broke ground on a 72 MW project.

National Market Trends

Supply in the eight primary U.S. data center markets* grew by 26%, totaling 5,174.1 megawatts (MW), and vacancy remained near a record low at 3.7%.

Data center construction also reached a new high in H2 2023 with 3,077.8 MW under construction in primary markets, a 46% increase from the same time last year (2,109.2 MW). With AI driving demand across most major markets and project delays persisting, securing space early is crucial. To that end, 83% (2,553.1 MW) of under construction supply is already pre-leased.

While supply chain disruptions have eased, construction costs are rising due to ongoing shortages in critical materials like generators, chillers and transformers. That trend is likely to persist throughout the year. Power constraints are creating opportunities for emerging data center markets in Nevada, Indiana and Wisconsin to host large data center facilities.

“The U.S. data center market saw the largest pricing increase of all commercial real estate assets last year, which is a testament to the market’s resiliency and impact of robust requirements for available power,” said Pat Lynch, executive managing director for CBRE’s Data Centers Solutions. “There is no sign that demand will slow down as the economy becomes more digital and artificial intelligence expands to new sectors. More operators and developers are prioritizing decisions that allow them to provide high value, technologically advanced spaces, which will help to drive future demand.”

Northern Virginia remained the most active data center market in H2 2023 with 1,237 MW of construction and 424.4 MW of total absorption for the year. Prices also rose significantly to $150-$190 per kW/month from $100-$140 per kW/month (42% year-over-year increase). However, Phoenix led U.S. data center markets in average asking rates at $170 - $200 per kW/month.

Top 10 Most Active Markets

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