The two dominant real estate research houses, JLL and CBRE, have released midyear snapshots of the North American data center market, and both paint the same picture in broad strokes: demand remains insatiable, vacancy has plunged to record lows, and the growth of AI and hyperscale deployments is reshaping every aspect of the business.
But their lenses capture different angles of the same story: one emphasizing preleasing and capital flows, the other highlighting hyperscale requirements and regional shifts.
Vacancy Falls Through the Floor
JLL sets the stage with a stark headline: colocation vacancy is nearing 0%. The JLL Midyear 2025 North America Data Center report warns that this scarcity “is constraining economic growth and undermining national security,” underscoring the role of data centers as critical infrastructure.
CBRE’s North American Data Center Trends H1 2025 numbers back this up, recording an all-time low North America vacancy rate of 1.6%, the tightest in more than a decade. Both agree that market loosening is years away — JLL projecting vacancy hovering around 2% through 2027, CBRE noting 74.3% of new capacity already spoken for.
The takeaway seems clear: without preleasing, operators and tenants alike are effectively shut out of core markets.
Absorption and Preleasing Drive Growth
JLL drills down into the mechanics. With virtually all absorption tied to preleasing, the firm points to Northern Virginia (647 MW) and Dallas (575 MW) as the twin engines of growth in H1, joined by Chicago, Austin/San Antonio, and Atlanta.
CBRE’s absorption math is slightly different, but the conclusion aligns: Northern Virginia again leads the nation, with 538.6 MW net absorption and a remarkable 80% surge in under-construction capacity.
CBRE sharpens the view by noting that the fiercest competition is at the top end: single-tenant requirements of 10 MW or more are setting pricing records as hyperscalers lock down scarce power and space.
Regional Expansion and Market Differentiation
JLL flags the gradual shift of hyperscale projects into secondary and tertiary markets, though it cautions that colocation demand remains concentrated in the Big Five hubs.
CBRE highlights which regions are winning new builds: Atlanta posted nearly 1 GW of new inventory in H1, while Dallas-Fort Worth is on pace to double in size by 2026.
CBRE also points to Charlotte-Raleigh, Austin, and San Antonio as fast-growth destinations where cheaper power and faster delivery timelines are pulling development.
The nuance here is important: JLL emphasizes the enduring dominance of core markets, while CBRE emphasizes the acceleration of emerging ones.
Both views are true, depending on whether you’re a hyperscaler chasing land and megawatts, or a colocation provider chasing enterprise proximity.
Financing and the New Capital Stack
JLL goes deep into capital flows, noting that data centers remain a favored asset class with expanding lender pools ranging from CRE banks to debt funds. Financing needs are evolving as utilities demand earlier deposits and developers pursue behind-the-meter solutions.
CBRE’s analysis, by contrast, centers on pricing: lease rates have surged to levels not seen since 2011–2012 — $200+ per kW per month for large requirements — though CBRE suggests double-digit annual increases are unsustainable long term.
Together, these insights sketch the same truth: money is available and tenants are willing to pay, but cost structures are becoming more complex, with power procurement at the heart of every deal.
The Power Imperative
Perhaps the sharpest throughline in both reports is the scarcity of power.
JLL cites rising capital requirements to secure utility commitments. CBRE frames power availability as the single largest factor shaping site selection, pricing, and delivery.
Both firms agree: without faster, more predictable power pathways, the market risks gridlock.
Conclusion: One Market, Two Angles
Step back, and JLL and CBRE are telling the same story in complementary ways.
JLL offers a macro portrait of vacancy, absorption, and capital appetite, while CBRE zooms into the hyperscale/AI effect, regional breakouts, and pricing escalation.
Together, they illuminate a market running at full tilt, with virtually no slack in the system.
For operators, investors, and end users, the message is the same. Success in 2025 and beyond will hinge on early commitments, creative financing, and a willingness to explore new geographies.
On the frontier of digital infrastructure, it is no longer enough to wait for supply. The future belongs to those who can pre-lease it, pre-fund it, and pre-power it.
