Los Angeles — Driven by demand from large cloud and enterprise users, U.S. data center leasing is on pace to exceed 2018’s record level, according to CBRE’s latest U.S. Data Center Trends Report. 

The seven primary U.S. data center markets saw 171 MW of net absorption in the first half (H1) of 2019, nearly 57% of 2018’s full-year record. That absorption nearly eclipsed the 200 MW of capacity added during the same time. Northern Virginia, the largest data center market in the world, accounted for 74% of net absorption in the primary markets.  

“Enterprise users have adopted hybrid colocation strategies as they seek more business, real estate, and IT agility,” said Pat Lynch, senior managing director, Data Center Solutions, CBRE. “This has led them to seek facilities that offer more than just competitive rental rates, including multi-cloud access and dense connectivity. We expect strong demand for space in facilities with interconnectivity and flexibility to continue, and for providers to adapt their construction plans and deal structures to keep pace with this need.”

Top U.S. Data Center Markets 

Northern Virginia remained the most active data center market, with net absorption of 126.4 MW in H1 2019, followed by Houston (14.4 MW), Silicon Valley (13.7 MW), Dallas-Fort Worth (11.2 MW), New York Tri-State (6.3 MW), Phoenix (6.0 MW), Southern California (5.8 MW), Chicago (4.8 MW),   Charlotte/Raleigh (3.2 MW), Minneapolis (2.3 MW).

Strong demand has resulted in more than 411 MW of capacity under development nationwide, in addition to the nearly 200 MW delivered in H1 2019. Northern Virginia accounts for 60% (248.7 MW) of the current construction activity in the primary markets, largely due to large requirements from cloud users. 

Other markets with significant construction activity include Phoenix, with 66.6 MW under construction as of H1 2019; Dallas-Fort Worth (34.6 MW); Silicon Valley (30.8 MW) and Atlanta (14.5 MW).

“The additional capacity under construction in the major data center markets will continue to lower pricing and keep these markets competitive with secondary markets, where space is priced at a slight