Intelligent Investment
Southern California
North America Data Center Trends H1 2024
August 19, 2024 4 Minute Read
Colocation Insights
- The AI boom finally reached Southern California, with most of the requirements sized between 2 and 20 MW.
- Despite an increase in market rents, there was a flurry of closed deals ranging from 200 to 750 kW.
- Data center providers continue to search the Greater Los Angeles metro area for new development opportunities.
Market Trends
- Strong leasing activity led to 14 MW of net absorption in H1 2024.
- Due to high leasing activity, the market has been unable to meet all demand from AI providers.
- Data center operators are securing longer lease terms ranging from seven to 10 years for 2+ MW requirements.
Notable Activity
- Centersquare secured a 7-MW prelease from an enterprise customer.
- Prime Data Centers secured a 21-MW prelease for an AI deployment in its Vernon data center.
Figure 1: Historical Market Information
Figure 2: Historical Supply and Demand
Figure 3: % of Total Secondary Market Inventory
Figure 4: Market Fuel Mix
*Includes solar, wind, geothermal, biomass and small hydro.
Figure 5: Average Asking Rates
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Rental rates remained firm due to reductions in available supply and power.
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The overall vacancy rate fell to 6.4% in H1 2024 from 7.3% in H2 2023.
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