Intelligent Investment
Silicon Valley
North America Data Center Trends H1 2023
September 6, 2023 4 Minute Read
Colocation Insights
- A major data center operator filed for bankruptcy, potentially bringing new supply into the market.
- A leading social media provider leased 8.5 MW in the area.
- Cloud service providers are currently the market’s top lessees.
Market Trends
- Occupiers are opportunistically signing new leases at different regional facilities and moving, which is disrupting the equilibrium of supply and demand.
- New facilities are 100% leased.
- Currently, legacy or second generation data centers are most available for lease.
- AI demand increases have not yet materialized in the market.
- The vacancy rate has increased from 2.3% in H2 2022 to 6.3% in H1 2023.
Notable Activity
- Prime Data Centers delivered 4 MW of new capacity in San Jose.
- Colovore is retrofitting an existing R&D building to deliver a 9 MW high-density facility with liquid cooling technology.
- Digital Realty, Prime and Stack developments are each shell complete.
- Vantage’s and Coresite’s new projects are actively under construction.
- EdgeCore started construction on June 26, 2023 in Santa Clara. Upon completion, the campus will support 72 MW of critical load across 540,000 sq ft.
- T5 delivered a newly renovated 17 MW facility in Newark, which is 50% preleased.
Figure 1: Historical Market Information
Source: CBRE Research, CBRE Data Center Solutions, H1 2023.
Figure 2: Historical Supply and Demand
Source: CBRE Research, CBRE Data Center Solutions, H1 2023.
Figure 3: % of Total Primary Market Inventory
Source: CBRE Research, CBRE Data Center Solutions, H1 2023.
Figure 4: Market Fuel Mix
Source: Silicon Valley Power.
Figure 5: Average Asking Rates
Source: CBRE Research, CBRE Data Center Solutions, H1 2023.
Explore Markets
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Demand continues to grow from technology, finance and healthcare sectors.
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AI leasing activity was strong in H1 2023.
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Rental rates increased up to 30% over the trailing 12 months.
Contacts
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