Blockbuster data center leasing isn’t just a Northern Virginia phenomenon anymore. As hyperscale operators continue to consume capacity, multiple markets around the country are starting to see super-sized leasing at a scale previously seen only in “Data Center Alley” in Ashburn.
The latest region to see boffo results is Dallas/Fort Worth, which had 286 megawatts of absorption in the first half of 2022, according to new research from real estate firm Cushman and Wakefield. The strong Dallas activity follows a JLL report of mega-scale leasing in Phoenix, where it reported 257 megawatts (MWs) of absorption in the first six months of 2022. Meanwhile, the emerging hyperscale hub of Hillsboro, Oregon had 199 MWs of pre-leasing in the second half of 2021, according to CBRE.
Leasing in the hundreds of MWs was previously seen only in Northern Virginia, known as the “home of the cloud” for the enormous concentration of infrastructure to support the growth of Amazon Web Services, Microsoft, Google and Meta. In some years, absorption in Loudoun and Prince William counties dwarfed the combined leasing in all other U.S. regions
That dynamic has changed as data center leasing has kicked into warp speed in 2022. Hyperscale operators are planning larger deployments in markets beyond Virginia, and provisioning large-scale capacity to keep pace with the growth of the digital economy, which has been accelerated by pandemic-related shifts in business activity, including greater reliance on video and a more distributed workforce.
The data center industry has been setting records for absorption in 2022 as hyperscale operators race to procure cloud capacity for long-term growth. Activity has been accelerated by concerns that delivery of future capacity may be slowed by supply chain disruptions, which are beginning to cause more delays in data center construction.
Big Dealings in Dallas
Dallas saw roughly 5 times the annual amount of leasing in the first half of 2022, said Bo Bond, Executive Managing Director for Cushman & Wakefield. Meta signed leases with three operators in the Dallas-Fort Worth region for more than 225 megawatts of data center capacity in the first half of 2022, Cushman reported.
