Americas Data Center H2 2024 Update

DALLAS AMERICAS PRIMARY MARKET

PLANO

FORT WORTH

GARLAND

RICHARDSON

KEY INDICATORS*

1,368MW In Operation

454MW 2024 Colo Leasing

500MW Under Construction

6.4% Colo Vacancy

SOUTH DALLAS

Colo

*Definition: Key indicators are based on operational Hyperscale Cloud, Colo, Edge & Telco data centre facilities in the market and excludes Captive & ICT.

Hyperscale Self-build

MARKET OVERVIEW Leasing activity in Dallas totaled 454MW in 2024, slightly below the 478MW leased in 2023 but still significantly higher than pre-2023 levels. Despite strong leasing activity, colocation availability in Dallas, is still higher than many other established markets — including Virginia — with 72MW of capacity on the market. Vacancy rates reflect this level of availability and currently sit at 6.4% across the metroplex. Of nearly 100 operational data centers in the Dallas market, 38 have some level of availability, though much of it is 1MW or less. Despite the 6.4% vacancy rate, demand in Dallas is showing no sign of letting up, particularly along the I-35 corridor to the south. The under-construction pipeline currently tops 500MW, with 88% preleased, while planned developments now surpass 4GW as well-known colocation firms commit to the market. The composition of the market is changing as well, further positioning Dallas as a major data center market, as wholesale providers represent a significant portion of the pipeline. Though hyperscale self-builds are represented in current operational commissioned capacity figures, they are largely absent from the pipeline, as hyperscalers either lease wholesale space or have otherwise shown more interest along the I-35 corridor between Dallas-Fort Worth and Austin, or farther west toward Abilene. This shift is driven by rising land values in the metroplex and growing concerns over long-term power availability. It is important to note that power availability is less constrained in Dallas than it is in other established markets, and power timelines are often shorter. Also, utility providers in the Dallas area are actively planning to accommodate rising power needs. For example, ERCOT’s regional transmission plan, covering 2026 to 2030, outlines investments in new transmission lines and substations to ease power delivery concerns. Additionally, the U.S. Department of Energy announced $1.5 billion to increase ERCOT’s grid reliability by connecting it to southeastern power markets.

ECOSYSTEM DEVELOPMENTS •

ERCOT's latest Regional Transmission Plan, released in December, includes upgrades to kV lines and new substations slated for 2026 to 2030. A joint study with Oncor, expected in 2025, will evaluate south Dallas, potentially shaping future investments in the area. • The Department of Energy (DOE) will provide $1.5 billion for four electrical transmission projects, including the 320-mile Southern Spirit line connecting ERCOT to southeastern power markets. This project aims to enhance grid reliability in Texas, which relies heavily on the ERCOT grid. • Rpower and Wise Asset are partnering to offer natural gas-powered land solutions for data center developers in Texas. They plan to develop over 3,000 acres in the Dallas-Fort Worth area to meet the growing demand for energy from large users, with availability by 2027. • CyrusOne plans to build a $200-million data center in Fort Worth, which is expected to be completed by the first quarter of 2026. This will be the company’s 15th facility in the state, adding to their extensive portfolio of data centers across the U.S. and globally. The facility, dubbed DFW7, will be located at Asphalt Drive in Fort Worth, Tarrant County, and will span 1.9 msf across a one-story data center and a two-story office component. • DataBank announced the development of a 480MW data center campus on 292 acres in Red Oak, Texas. The campus will feature up to eight two-story data centers, adding to DataBank's significant presence in the Dallas area. Phase 1, expected to be completed by the second quarter of 2026, will include four buildings and a 400MW substation from Oncor that will deliver up to 240MW of critical IT power. Phase 2 will expand this capacity to a total of 480MW across all eight buildings. • Hanwha Energy plans to develop a 200MW AI data center in Texas, estimated to cost $1.45 billion. Construction is set to begin next year, pending necessary power and water infrastructure, with the data center expected to operate hundreds of thousands of servers and be partially powered by Hanwha's 2GW solar plant in Texas.

CUSHMAN & WAKEFIELD | AMERICAS DATA CENTER MARKET OVERVIEW