Atlanta is emerging as a national leader in the data center market, especially in the construction of new properties, with 705.8 megawatts (MW) of positive net absorption last year. That is about 39 times higher than its year-end 2023 showing of 18 MW, according to CBRE’s North American Data Center Trend Report.
Atlanta is the first primary market to surpass Northern Virginia in data center net absorption since CBRE began tracking the sector. It also showed the highest volume of colocation leasing activity ever in 2024.
The market is attractive thanks to a business-friendly environment and reliable power infrastructure, said CBRE senior vice president of data center solutions, Mike Lash.
“With demand surging and new construction facing longer lead times, the industry is strategically focused on densifying existing data centers to expand capacity rapidly,” said Lash. “This approach allows providers to meet market needs efficiently while maintaining Atlanta’s momentum as a top-tier data center hub.”
Demand for data center space is being fueled by both colocation and GPU-as-a-Service (GPUaaS) tenants, the report said. Despite a more than 200% increase in data center inventory last year for a total of 1,000.4 MW, the appetite for the sector has prompted Atlanta to ramp up construction. During the second half of last year, the market had 2,159.3 MW under construction, a 195% year-over-year.
Northern Virginia remained the largest data center market with 2,930.1 MW of total inventory. It had 451.7 MW of total absorption in 2024.
Across North America, the data center space doubled supply under construction to 6,350.1 MW in 2024. By comparison, 456.8 MW is under construction in 2020, said CBRE. Eight primary North American data center markets saw a significant uptick in completed construction last year, with total supply reaching 6,922.6 MW. The sector is still struggling, however, to meet current demand due to extended construction timelines driven by power constraints and supply chain delays, said CBRE.
Sites with access to power are garnering attention from developers and investors regardless of location. Well-positioned markets for power accessibility include North Carolina, Northern Louisiana and Indiana.
The average data center vacancy rate in primary markets reached a record low 1.9% last year, decreasing across all primary markets for the first time in 12 years. At the same time, the national average lease rate increased to a record $184.06 per kW/month, up 12.6% year-over-year. This is the third consecutive year of double-digit percentage increases.