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3/17/25
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This report provided by CBRE
Growth in artificial intelligence is driving data center demand in Washington State, according to CBRE’s latest North American Data Center Trend Report. Tenants and owners are also attracted to the state’s tax incentives, green power and colocation capabilities.
Central Washington had the lowest vacancy of all data center markets at 0.16% in H2 2024, which is the lowest of the 18 North American markets that CBRE tracks since the report’s inception. This is down from 0.2% vacancy in H1 2024. Meanwhile, Seattle’s vacancy rate fell to 6.7%. It is noteworthy that both markets have increased in size with delivery of high-powered pre-leased product.
“Washington state’s data center tax exemptions and reliable hydropower have provided some of North America’s lowest total cost of occupancy (TOC) solutions for data center operators and users. Artificial intelligence equipment has dramatically increased the amount of power needed to cool data centers, so existing utility providers are struggling to meet the surging demand. Both operators and utilities across the state are exploring a myriad of alternate power sources to expand their offerings,” said Jane Blair, senior vice president with CBRE Data Center Solutions in Seattle.
Central Washington tripled net absorption (60 megawatts) – a measure of leasing activity – in 2024 from the year prior, which was the sixth highest among the top data center markets. In 2023, Central Washington ranked eighth in leasing activity (20.9 MW).
Seattle ranked 12th in net absorption (11.1 MW) in 2024, up from 10.6 MW of net absorption in 2023.
Seattle had 8.5 megawatts (MW) under construction in H2 2024. This is more than double the 3.5 MW under construction in H2 2023. Central Washington had 63.7 MW under construction in 2024, 56% of which was pre-leased. While this is down from 99.7 MW under construction in H2 2023, over 100 MW of new construction is planned.
In late H2 2024, CyrusOne completed its Quincy development in Central Washington. In Seattle, Sabey announced plans to expand its SDC Building 4 as well as developing plans to add a new data center building to its campus.
National Trends
CBRE’s latest North American Data Center Trend Report found the North American data center sector doubled the amount of supply under construction in 2024 from the previous year to a record 6,350.1 MW —a 12-fold increase from the 456.8 MW under construction in 2020.
This surge highlights the growing need for data centers that can meet the power demands of AI companies.
Last year, the eight primary North American data center markets* saw a significant uptick in completed construction, with total supply reaching 6,922.6 MW—a 34% year-over-year increase. This growth outpaced the 26% increase in new supply in 2023. Yet the sector still is struggling to meet current demand due to extended construction timelines driven by power constraints and supply chain delays.
In 2024, the average vacancy rate in primary markets reached a record low of 1.9%. Vacancy rates decreased across all primary markets for the first time since CBRE started tracking the data center sector in 2013. In tandem, the national average lease rate rose to a record $184.06 per kW/month, up 12.6% from a year ago, marking the third straight year of double-digit percentage increases.
The power demand of artificial intelligence is a key influence on site selection as occupiers prioritize sites with power available in the next 18 to 24 months, a short timeframe in the current market. Sites with access to power are attracting attention from developers and investors regardless of location, which is a shift from previous years. Markets in North Carolina, Northern Louisiana and Indiana are positioned for significant growth due to greater power accessibility, available land and tax incentives.
Top Data Center Markets
Primary market net absorption jumped from 329.6 MW in 2020 to 1,809.5 MW in 2024—a 450% increase in just four years. In 2024, Atlanta emerged as the national leader in net absorption, achieving 705.8 MW of positive net absorption — nearly 39 times higher than year-end 2023 (18 MW). This is the first time any primary market has surpassed Northern Virginia in net absorption since CBRE began tracking the sector.
Despite being outpaced in overall net absorption, Northern Virginia remained the largest data center market with 2,930.1 MW of total inventory, 17% larger than a year prior due to robust construction. Northern Virginia recorded 451.7 MW of total absorption in 2024.
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