Where’s the cloud? Northern Virginia accounts for two-thirds of data center leases

Northern Virginia continued to dominate the data center market in 2022, ranking by far No. 1 for leasing activity, and there’s almost a waiting list for space.

Commercial real estate firm CBRE reports the data center vacancy rate in Northern Virginia ended the year at less than 1%, a record low.

Northern Virginia set a new record for a single year with 436.9 megawatts of leasing absorption in 2022, more than half of it in the first half of the year, with major cloud providers continuing to fuel the demand.

“Northern Virginia experienced a tremendous spike in leasing activity in early 2022, which resulted in tightening vacancy throughout the year, said CBRE senior vice president Jamie Jelinek. “As a result we saw developers aggressively seeking new development sites with appropriate entitlements and access to power.”

Northern Virginia data centers accounted for 64% of all data center leasing nationwide last year.

Data center demand nationwide is at a record high. CBRE says the seven primary U.S. data center markets saw leasing activity up nearly 40% from a year earlier in 2022, and despite a 17% increase in available data center space, vacancy nationwide fell to a record low 3.2%.

Data center leasing slowed in the second half of 2022, but CBRE said that was entirely driven by lack of available space and power constraints.

Data center growth has accelerated since the pandemic began with the adoption of hybrid and remote work technologies, as well as companies prioritizing private cloud networks for their IT infrastructures.

CBRE’s full North America Data Center Trends for 2022 is online.

Below are the top 10 most active data center markets in 2022:

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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