Northern Virginia remains king of data centers

There is a good chance that much of what you do on the internet flows through data centers in Northern Virginia, and the region once again led for delivery of new data center capacity in 2020.

CBRE reports Northern Virginia had 217.2 megawatts of net data center absorption in 2020, more than five times that of No. 2 Toronto. The data center vacancy rate in Northern Virginia fell to 5.6% from a year earlier.

Northern Virginia currently accounts for 61% of the total construction pipeline of new data centers in North America.

“Notwithstanding the uncertainty experienced through the pandemic, the Northern Virginia data center market continued to grow at a rapid pace, with little-to-no delays in delivery timelines,” said CBRE senior associate Josh Greenberg.

“With a large amount of pre-leasing occurring in the second half of 2020, we expect 2021 to be another strong year for absorption, perhaps a record year.”

Data centers have been one of the fastest growing real estate sectors. The pandemic kept demand strong in 2020, with businesses reconfiguring their digital infrastructures to improve remote work capabilities.

The seven primary data center markets in the U.S. are Northern Virginia, Dallas, Silicon Valley, Chicago, Phoenix, the New York tri-state area and Atlanta.

Across those seven primary markets, total net absorption in 2020 was 329.6 megawatts. Total absorption was higher than any other year on record.

As of the end of 2020, there was 457.8 megawatts of data center capacity under construction in the seven primary markets, up 62% from the end of 2019. More than half of the current pipeline is already pre-leased.

CBRE’s entire North American Data Center Trends report is posted online.

Below are the top 10 most-active data center markets in North America and their growth in 2020, according to CBRE:

 

Jeff Clabaugh

Jeff Clabaugh has spent 20 years covering the Washington region's economy and financial markets for WTOP as part of a partnership with the Washington Business Journal, and officially joined the WTOP newsroom staff in January 2016.

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