Developers could invest $1 trillion in North American data centers between now and 2030 after overall vacancy hit an all-time low despite a record amount of storage capacity.
That is among the conclusions of a midyear report on data centers by the world’s second-largest commercial real estate services firm, Chicago-based JLL.
Overall vacancy on the continent has fallen to an unprecedented 2.3%, the report says, despite inventory reaching a record 15.5 gigawatts.
JLL’s report is the latest eye-opening data point in the race by data center developers, technology giants and power companies to keep up with ever-growing demand for cloud storage and new demand generators such as artificial intelligence and quantum computing.
There are few signs of supply catching up to demand in the coming years as developers and data users scour the continent for sites connected to ample power sources.
For tenants, that spells the need to commit far sooner to projects than in the past, with 73% of all under-construction capacity already pre-leased, according to the report. Tenants that once needed to commit six to 12 months in advance are now acting 18 to 24 months ahead of time, if not even earlier, according to a JLL statement about the report.
“The days of build-it-and-they-will-come are long gone,” Matt Landek, division president of JLL’s U.S. Data Center Work Dynamics group, who also leads JLL’s Data Center Project Development and Services, said in the statement. “What we’re seeing now is ‘commit-before-it’s-built-or-you-won’t-get-in.’ This is fundamentally changing how companies approach their data center strategies.”
The midyear report updates previous analysis by JLL that already projected increased investments in the sector to meet fast-expanding demand.
In one high-profile example, the AI industry’s Stargate project in West Texas landed $7.1 billion from lenders including JPMorgan Chase to fund a second phase of construction.
New demand drivers such as AI have led developers to push into new areas, particularly near existing nuclear power plants, planned nuclear facilities or other power sources.
The industry also has adjusted to unexpected twists, including Chinese upstart DeepSeek’s arrival on the world stage with what it said is a lower-cost AI model. That led industry experts to debate whether a lower barrier to entry might further inflate data storage needs.
“The colocation market is experiencing unprecedented demand pressure under an increasingly stressful environment,” Andy Cvengros, JLL executive managing director and co-Lead of U.S. Data Center Markets, said in the statement. “The first half of the year was riddled with disruptions, including the DeepSeek news at the beginning of the year and the potential impact of tariffs on demand and construction. Despite the turbulence, the sector posted another record-shattering performance.”
Power play
The biggest hurdle in meeting demand is also the greatest protection against an oversupply bubble, according to the JLL analysis: availability of power.
A 30% increase in commercial electricity rates since 2020 and long wait times for development sites to be connected to the power grid have pushed some projects out of the largest data storage markets.
“Power has become the new real estate,” Andrew Batson, JLL’s head of U.S. data center research, said in the statement. He added that 100 gigawatts of capacity could break ground over the next five years, not including the potential upside of quantum computing usage.
Northern Virginia is by far the largest market, with 5.6 gigawatts of total capacity compared with 1.5 gigawatts in the second-largest area, Dallas-Fort Worth, according to JLL. One gigawatt can power 750,000 to 1 million homes.
The construction pipeline is poised to significantly increase the size of many markets, with 7.8 billion gigawatts under construction representing 10 times the volume from just five years earlier, according to JLL. The largest pipelines outside of Northern Virginia are Phoenix, with 1.3 gigawatts; Chicago, with 1.18 gigawatts; and Atlanta, with 1.1 gigawatts.
Growing markets
Atlanta’s total capacity has doubled since 2023, and it is on pace to double again by 2026, according to the report.
In part by offering competitive tax incentives, New Jersey is fast emerging as one of the nation’s top data storage markets.
Columbus, Ohio, has experienced 1,800% growth since 2000, with Austin/San Antonio in Texas expanding 500% over the same time, according to JLL. Another fast-growing market is Las Vegas and Reno in Nevada.
Over the past two years, more than 2,000 acres have been acquired in the Columbus market for data centers, with nine different operators buying sites between 80 and 500 acres during that time, according to the report.
Amazon Web Services has five data centers in the Columbus area. Late last year, the company announced plans to boost its data storage investments in the state by $10 billion.