HOUSTON – (Realty News Report) – AI is powering a boom in data centers and it’s not slowing down any time soon.
Data center construction in North America soared to a new high in 2024 with top and secondary data center markets gaining capacity amid a surge in power demand driven by users of artificial intelligence.
“We saw unprecedented demand last year in the North American data center market fueled in part by AI and digital services — which drive a need for modern data centers — and investment from hyperscalers and developers,” said Pat Lynch, Executive Managing Director and Global Head of CBRE Data Center Solutions. “However, the risk of oversupply in the near term is minimal because of extended timelines for power delivery and wait times of 36 months or more for electrical equipment such as transformers, generators and switchgear.”
Developers added data centers totaling a record 6,350.1 megawatts in power capacity in 2024 or roughly double the size in 2023, according to a new report by CBRE. The amount compares with just 456.8 MW under construction in 2020.
Among the highlights, Northern Virginia kept its position as the region’s largest market with 2,930.1 MW in total inventory in 2024, a 17% increase over the prior year. Meanwhile, Atlanta, which surpassed Northern Virginia as the top market for absorption, more than tripled its inventory in 2024 to a total of 1,000.4 MW, while Phoenix saw a 67% increase to 602.8 MW in inventory.
In Texas, Dallas and Austin/San Antonio were cited as some of the fastest growing cities for data center construction. Dallas had 605.6 MW under construction in 2024 and a total inventory of 591.0 MW. Austin/San Antonio had 463.5 MW under construction and a total inventory of 191.1 MW. The growth was more measured in Houston, which had a 2024 inventory of 179 MW and 21 MW under construction.
Serverfarm Files for 560,000-SF Data Center in Hockfey Near Houston
In Houston last week, the Serverfarm company filed plans to build a 560,000-SF data center on Betka Road in the Hockley area on the northwest side of Houston. The El Segundo, Calif.-based Serverfarm said the $137 million facility is a “ground-up development” of a data center that will be completed in July 2026, according to the Texas architectural filing.
Capacity at New Data Centers Soaked Up Fast
In the nation’s eight primary markets, net absorption reached 1,809.5 MW in 2024, up from 329.6 MW in 2020, according to CBRE.
Data center customers are prioritizing sites with power available in the next 18 to 24 months, according to CBRE. Places such as North Carolina, Northern Louisiana and Indiana with access to power, available land and tax incentives stand to grow.
“In 2025 we expect new markets to emerge that can offer quicker access to power,” said Gordon Dolven, Director of Americas Data Center Research at CBRE. “We are monitoring all types of power generation sources, including natural gas, solar, wind, geothermal, and nuclear power.”
March 18, 2025 Realty News Report Copyright 2025
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File:AI Brings Data Center Construction Boom CBRE, Hockley AI Brings Data Center Construction Boom
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