AI Data Centers: Demand Explodes, Vacancy Hits Record Lows

Why It Matters

Record‑low vacancy and soaring construction activity signal a lucrative but constrained market, forcing developers to secure talent, diversify locations, and partner with communities to meet AI‑driven data‑center demand.

Key Takeaways

• North American data center vacancy falls below 2%
• Turnkey colocation prices rising mid‑teens across primary markets
• Supply growth outpaces demand, yet vacancy remains record low
• Emerging secondary markets like West Texas attract large‑scale projects
• Talent shortages and construction costs challenge rapid data‑center expansion

Summary

The AI Tech Talk episode spotlights a seismic shift in North American data‑center dynamics, where exploding AI workloads have driven vacancy to an unprecedented sub‑2% level and pushed turnkey colocation pricing into the mid‑teens percent range. CBRE’s Pat Lynch and Gordon Dolvin unpack the latest H2 trends, noting a 30% aggregate supply increase across primary markets, a 12‑fold surge in under‑construction capacity over five years, and an 80% pre‑lease rate for those projects, underscoring the intensity of demand.

Key data points reveal that while primary metros like Dallas‑Fort Worth and New York continue to attract megawatt‑scale builds, power‑intensive AI models are prompting developers to scout secondary and tertiary sites—West Texas, for example—where larger land parcels and cheaper electricity are available. At the same time, the industry anticipates a pivot toward edge and inference AI workloads that demand latency‑sensitive, smaller‑scale facilities in major population centers, reshaping the demand landscape.

The conversation also highlights community impact: data‑center projects generate substantial tax revenue, create thousands of construction and trade jobs, and increasingly involve developers in local amenities such as schools and parks. Pat emphasized the talent bottleneck—both construction and operational—while Gordon cited the need for localized utility coordination across the nation’s 3,000 power providers.

For investors, developers, and policymakers, the takeaways are clear: capitalize on emerging secondary markets, address talent pipelines, and engage transparently with local stakeholders to sustain growth amid tightening supply, rising costs, and evolving AI‑driven demand.

Original Description

AI Data Center Boom: CBRE on Record-Low Vacancy, New Markets, Talent Shortages, and the Next Wave of AI Infrastructure

Welcome to RCRTech AI TechTalk, where we explore the trends shaping AI infrastructure, data centers, and the digital economy.

In this episode, host Susanna Schwartz is joined by Gordon Dolven, Research Director – Americas Data Centers at CBRE Data Center Solutions, and Pat Lynch, Executive Managing Director at CBRE Data Center Solutions, to break down the latest insights from CBRE’s North American Data Center Trends Report.

The conversation begins with one of the most striking metrics in today’s market: vacancy rates below 2% for turnkey colocation space across North America. Despite rapid construction and major supply growth, demand from hyperscalers, cloud providers, and AI companies continues to outpace available capacity. At the same time, pricing across many major markets has increased by mid-teen percentages, reflecting intense competition for available data center space.

Gordon and Pat explain how the rise of AI training workloads and hyperscale deployments is dramatically increasing the size of data center projects. What once required modest land footprints now demands 100–200 acre sites capable of supporting hundreds of megawatts—or even gigawatts—of power capacity.

As a result, developers are expanding beyond traditional hubs and exploring secondary and emerging markets where large-scale power and land are more accessible. Regions such as West Texas are now being evaluated as potential data center frontiers thanks to improvements in fiber connectivity and power infrastructure.

The discussion also highlights a major industry challenge that often receives less attention: talent shortages. As construction accelerates, demand for electricians, engineers, mechanical specialists, and data center operations professionals is growing rapidly. Workforce development initiatives and partnerships with organizations such as iMasons and military transition programs are becoming essential to sustain the industry’s growth.

Finally, the guests address the evolving relationship between data center developers and local communities, emphasizing transparency, economic impact, and long-term partnerships. Data centers generate construction jobs, long-term operational roles, and significant tax revenue, but industry leaders acknowledge that better communication is needed as projects become larger and more visible.

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