North American Data Center Trends Report H1 2021

The data center sector continues to benefit from the ongoing digitization of the global economy, fueled by ever-rising consumer demand for e-commerce, the explosive growth of edge computing and other secular trends.

What’s in the Report

CBRE’s comprehensive review covers the state of the data center sector in key markets across the U.S. and Canada, featuring insights into investment activity, supply and demand changes, current industry trends and emerging ones to watch for the rest of 2021 and beyond.

Key Takeaways

• Demand for space in data centers rose, with most markets reporting positive net absorption for the first half of the year.
  
• Wholesale colocation inventory topped three gigawatts in primary markets as providers brought 214.3 megawatts of new space online during H1 2021.
• New construction in primary markets at the midpoint of 2021 was up 42% year-over-year.
  
• Vacancy rates reached historically low levels in several markets, led by Silicon Valley with a nationwide-low of just 1.6%.
• Investors remained focused on top-tier assets—those with strong underlying tenancy and significant remaining lease term.
• Sustainability is a higher priority, with a focus on sourcing clean energy, as well as alternative solutions such as air-cooled systems and, increasingly, water conservation.
• Interest in edge computing and edge data centers is rising, prompting the positioning of centers closer to end users to support 5G, artificial intelligence, blockchain technology and media content traffic.
• Some users are moving away from a cloud-first approach to a hybrid IT structure.