North Carolina Data Center Construction Jumps 15X as Cloud and Artificial Intelligence Providers Drive Demand

Data center construction in North Carolina’s two largest metro areas, Charlotte and Raleigh, has never been higher. As of the first half of 2024, the combined markets had 113.4 megawatts (MW) of data center space underway, more than 15 times the previous high in H1 2016, according to CBRE’s latest North American Data Center Trend Report.

Of the market’s new space under development, approximately 90% of it is preleased. Charlotte/Raleigh is one of just two secondary markets tracked by CBRE to have more data center space under construction than currently online, the other being Austin/San Antonio.

If the region’s total construction inventory delivered tomorrow, the combined Charlotte/Raleigh market would become the fourth largest secondary data center market in North America, eclipsing the likes of Southern California and Seattle. Charlotte/Raleigh currently ranks eighth largest among CBRE’s top secondary markets.

“The Carolinas are seeing tremendous demand from developers and end users as power becomes more challenging to procure in primary markets,” said Ben Rojahn, vice president with CBRE’s Data Center Solutions in Charlotte. “Demand is mostly focused around Charlotte now but will eventually spread to all areas between Northern Virginia and Atlanta. Duke Energy continues to have available power capacity and we’re working to identify sites where data centers can consume that power.”

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.”

There were 601.7 megawatts (MW) of new supply added in the eight primary and eight secondary North American data center markets in H1 2024, equivalent to adding the entirety of Dallas-Fort Worth’s existing inventory. Charlotte/Raleigh added 3.6 MW year over year and absorbed 5.4 MW since last year.

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Northern Virginia remained the largest data center market in H1 2024 with 2,611.1 MW of inventory and 108.1 MW of total absorption, down 87.4 MW (43.9% decrease) year over year. Two markets saw higher leasing activity in the first half of the year: Hillsboro, Oregon (171.2 MW absorbed, a 120% increase year over year) and Phoenix (148.1 MW absorbed, a 238% increase year over year).

Other notable markets include Chicago, where developers have completed 221.1 MW over the past year – a 60% increase in overall inventory. Dallas/Fort Worth reported record preleasing activity, with 94.5% of capacity/space under construction (446.1 MW) already claimed.

“As we look to 2025, several trends are influencing the data center industry, including emerging markets for development due to tax incentives, advancements in renewable energy, power availability and a need for accelerated construction completion timelines,” said Gordon Dolven, director of Americas Data Center Research at CBRE. “Meanwhile, artificial intelligence is shifting how operators select sites. We are seeing more flexibility from developers for sites outside of traditional central business districts if AI training models do not require low latency requirements 24/7.”

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