Record Data Center Construction Still Falling Way Short Of Soaring Demand

Global data center construction is exploding at a pace the industry has never seen, but even this historic building boom is nowhere close to catching up with demand through 2030.

Capacity in the world’s largest markets jumped 25% in the past year, but vacancy keeps falling and usable space in the biggest hubs has all but vanished, further driving up rents, according to new CBRE data. Higher rents will keep investor interest elevated just as political and community backlash to data centers increases.

“Across the globe, demand is outpacing even aggressive new supply increases, which means companies can no longer assume capacity will be available when they need it,” Pat Lynch, Executive Managing Director of CBRE’s Data Center Solutions practice, said in a statement.

The four largest U.S. markets — Northern Virginia, Atlanta, Dallas-Fort Worth and Chicago — added nearly 2 gigawatts in the preceding 12 months, up 33% year-over-year as developers race to keep up with demand.

But even amid this wave of new construction, data center capacity is becoming increasingly hard to find for tenants, particularly in the largest U.S. data center hubs.

There are fewer than 75 megawatts of available capacity across the top four North American markets combined as supply falls further behind booming demand driven by Big Tech’s escalating arms race. Tenants absorbed more than 2.2 GW in North America in the first quarter alone.

The average global vacancy rate fell to 6.7% in Q1 from 8.3% a year earlier. Available inventory is even harder to find in the U.S., with vacancy rates falling to all-time lows of 0.3% in Northern Virginia and 1.8% in Dallas-Fort Worth despite inventory in both markets growing by close to 40% over the past year. 

The result is tenants that are looking to snap up new capacity faster than it can be built. 

“Occupiers are having to secure space earlier, take what’s available from a capacity standpoint and prioritize markets with dependable power to support long-term growth,” Lynch said. 

At the end of 2025, 80% of the data center space under construction in the four largest U.S. markets was already preleased, with tenants scrambling to secure new capacity months or even years before it comes online.

Those numbers are even higher in digital hotbeds like Dallas, where 88% of the construction pipeline is already spoken for.

This capacity squeeze is expected to continue in the months and years ahead, with no anticipated slowdown in demand and stubborn hurdles limiting new development.

While hyperscalers like Amazon, Microsoft, Google and Meta pursue gigawatt-scale artificial intelligence campuses in remote locations, they are still hunting for contiguous blocks of capacity in the major markets, both for traditional workloads and increasingly for AI inference.

Corporate tenants are also driving demand for AI computing in major markets, as are AI startups and so-called neoclouds, which are AI-specific cloud providers like CoreWeave that represent the fastest-growing data center subsector, with nearly 200 firms. 

The data center sector’s ability to keep up with this demand continues to be stymied by headwinds that CBRE predicts will limit data center supply through the end of the decade.

Power availability is the biggest constraint when it comes to delivering new data centers in most major markets, with yearslong wait times for grid connections stretching development timelines. 

At the same time, rampant local opposition in communities across the U.S. has quickly emerged as a primary constraint on the industry’s growth. Local zoning and permitting processes that were once predictable are now routinely venues for community pushback that delays or derails projects. 

Other factors, such as a shortage of skilled construction labor and other supply chain constraints, also play a role in preventing the supply of new data center inventory from catching up with demand. 

As a result of this continuing supply-demand imbalance, rents are on the rise in most major global markets. In the U.S., Chicago saw the most dramatic pricing increase among top industry hubs, as Q1 rents jumped 14.7% year-over-year. Atlanta rents rose 2%, while pricing remained steady in Virginia and Dallas-Fort Worth. 

While rents in North American markets grew at a more moderate pace compared to the first three months of 2025, that isn’t indicative of impending pricing relief for data center tenants, according to Gordon Dolven, CBRE’s head of data center research for the Americas. He said rents will continue to rise to “unprecedented highs” in the months ahead. 

“These supply constraints will push pricing higher and shift new investment toward markets that can scale quickly,” Dolven said.