The report “North America Data Center Report” by JLL highlights the critical role data centers play in modern society, supporting our daily activities by storing and processing vast amounts of data. This report sheds light on the insatiable demand driving the growth of data centers, fueled by the ever-expanding realms of cloud computing and hyperscale technologies.

In the heart of North America, data center markets are bustling with activity. From the bustling hub of Northern Virginia to emerging secondary markets, a surge in construction is reshaping the landscape. Picture towering multistory data centers and innovative microgrids sprouting up to meet the challenges of limited space and ensure uninterrupted power supply.

However, amidst this growth lies a tale of challenges. Rising rent and power costs cast a shadow over both small and large players in the industry, emphasizing the need for strategic financial planning. The report dives into the intricate web of financing activities and mergers shaping the data center realm, offering a glimpse into the dynamic financial landscape.

In conclusion, the dynamic landscape of North America’s data center industry is characterized by robust demand, evolving construction trends, financial opportunities, and the need for specialized expertise to navigate this rapidly growing sector.

This report is free to download here:

A summary of key findings in the report includes:

Increasing Investor Interest: Data centers are experiencing growing investor allocations, with a 9% compound annual growth rate (CAGR) in transactions since 2013, making it one of the most attractive sectors for investment after life sciences

Demand and Availability: Accelerating demand for data center capacity, particularly driven by cloud and hyperscale demand, is outpacing supply, leading to limited availability and increased preleasing. Construction is spreading to secondary and tertiary markets in search of power

Construction Trends: Data center capacity under construction in primary and secondary markets exceeds 5.3GW, with significant construction activity in response to rising demand. Multistory data centers and microgrids are emerging trends to address land constraints and ensure power resiliency

Rising Rent and Power Costs: Rates nationally have risen for both small and large requirements due to strong demand, with power rates increasing in all primary markets. The cost of operation is impacted by growing rent and power costs

Financial Landscape: Transaction volume in single-asset and portfolio sales for 2023 increased by 67% from the previous year, reaching $4.6 billion. Financing activity for data centers remains steady, with a strong appetite for mergers and acquisitions within the sectorJLL Report

Expertise Requirement: With uncertainty in other sectors like office spaces and logistics, data centers are attracting interest as alternative investment segments. However, expertise is crucial due to the unique operational requirements of data centers