Top insights for IT pros
From cybersecurity and big data to cloud computing, IT Brew covers the latest trends shaping business tech in our 4x weekly newsletter, virtual events with industry experts, and digital guides.
North American primary markets added the equivalent of an entire Silicon Valley’s worth of data capacity in the first six months of 2024 alone, per the H1 2024 edition of real-estate services company CBRE’s data center trends report.
Across North America’s eight primary markets, according to the report, 515 megawatts (MW) of new capacity became available during that time—outstripping the total capacity of Silicon Valley, which stands at 459 MW.
In the middle of 2024, the US had just shy of 5,700 MW of total capacity, CBRE estimated. That’s a 10% increase over six months alone. Year over year, primary market supply rose by around 1,100 MW, or 24%.
Companies are continuing to secure additional data center capacity even in the face of power and equipment shortages that have hampered expansion, business news site Sherwood reported, as well as renewing leases even when their existing facilities are less than ideal.
“We’re signing leases that some of these clients won’t occupy for three or four years,” Executive Managing Director and Global Head of CBRE Data Center Solutions Pat Lynch told Sherwood. “They have no other choice. It just shows that their capacity need is not going anywhere, and they just want to get in on it.”
As Sherwood previously reported, FactSet and Census Bureau data shows the data center boom drove “private spending on computer, electronic, and electrical manufacturing construction” to nearly $132 billion in April 2024. In April 2022, that number stood at around $26 billion.
Vacancy rates for data centers have also fallen in both primary and secondary markets, according to the CBRE report, respectively declining from 3.3% to 2.8% and 12.7% to 9.7% in the first half of 2024 compared to the prior year. CBRE also found that the vast majority (nearly 80%) of new capacity in primary markets was preleased while under construction, meaning operators are securing the majority of space well before it’s actually available to be used.
Access to electrical grids remains the top consideration in new site planning, according to CBRE. The relative scarcity of such sites, in combination with exploding demand for power-hungry technologies like generative AI, is contributing to questions around the market’s long-term commitment to sustainability.
Other considerations include access to or the cost of constructing new fiber lines—another constraint for operators that need low-latency connections—and, increasingly, water supplies.
“The dearth of suitable sites has led to bidding wars for the few that meet certain power and fiber requirements,” CBRE researchers wrote.
It remains to be seen whether looming carbon emissions reduction targets by 2030 will spur operators to prioritize improvements in cooling, waste heat recycling, and sourcing power from renewables, the report concluded.