Americas Data Center H2 2024 Update

H2 2024 UPDATE

AMERICAS DATA CENTER UPDATE – H2 2024 Artificial Intelligence (AI) continued to be a topic of interest to the data center industry in 2024, and demand for capacity has grown to reflect that interest over the course of the year. The construction pipeline swelled in the second half of the year, with 6.4GW of capacity underway — most of which has already been leased, as large-scale contiguous live capacity remains scarce. Power constraints remain the top challenge for hyperscale and colocation providers, heavily influencing site selection and driving expansion into less established data center markets across the region. Many regional utility providers have gigawatts of unfulfilled requests. Available space in operational data centers is scarce throughout the Americas, with just 607MW available across 569 facilities in North, Central and Latin America. Much of this space is 1MW or less, driving heightened leasing activity in the growing development pipeline. Of the 6.4GW currently under construction, 82% is already committed, with another 17% of planned capacity spoken for. The total planned data center pipeline has surged to 46GW, as demand for cloud computing and AI continues to accelerate. years or more. Where utility providers can't provide power sooner, some operators have collaborated with power companies to deliver substations, transmission lines or tap into microgrid power. Many of these agreements are being signed directly with third-party energy generation developers, accelerating wind, solar, battery storage, natural gas and geothermal projects. In markets like Atlanta and Silicon Valley, new power generation plans to ease constraints are being created or are newly in place. Meanwhile, a growing segment of hyperscale users is exploring the feasibility of implementing small modular reactors (SMRs) to meet power needs, though deployments of this technology are at least five years away. Hyperscale development in the Americas is largely driven by power availability first, with land values and availability second — spurring activity in periphery markets. Occupiers remain focused on availability and, unlike hyperscale users, are often bound to specific markets. Power availability remains the top consideration for data center developers, with operators seeking two- to three-year delivery times but often facing delays of five

North America continued its high-growth trajectory, reaching 20GW of operational capacity, with 1.5GW added in H2 2024, bringing the total capacity added for the year to 3.2GW.

With power and component lead times constraining delivery of new supply, vacancy region wide is currently at 4.9%, driving 82% of deliveries to be preleased and placing upward pressure on lease rates. Interest in large-scale power availabilities, plentiful land and less strict latency requirements for AI has driven hyperscalers and operators to expand into historically peripheral markets like Indianapolis, Kansas City, Reno, Charlotte, Salt Lake City, Minneapolis, Philadelphia, Montgomery, and other outlying areas.

Virginia remains the largest data center market globally, with 5.9GW in operation, 1.8GW under construction, and 15.4 GW planned. Following Virginia in operational capacity are other large markets: Portland and Eastern Oregon (2GW), Columbus (1.8GW), Phoenix (1.5GW), Dallas (1.4GW), and Chicago (1.2GW), all of which have seen continued activity

despite varying power availability limitations.

CUSHMAN & WAKEFIELD | AMERICAS DATA CENTER MARKET OVERVIEW