Data center asking rents surged as much as 54% over eight months

Average asking rental rates in key North American data center markets increased by 20 percent to 54 percent past the past eight months, according to CBRE.

The rent growth in markets such as Chicago, Dallas-Ft. Worth, Northern Virginia, Phoenix and Silicon Valley is driven by strong demand that is exceeding supply increases and has pushed rates close to the peak highs of 2010-2011. Data centers are integral to the digital economy, particularly with the rapid growth of AI and data storage and processing. New capital sources and investment were projected to push down rental rates. However, power constraints are delaying new construction and are the biggest impediment to expanded data center supply. This has caused leasing competition for existing data centers to intensify and rents to remain elevated. Occupiers now typically pre-lease space 18 to 36 months in advance, markedly earlier than the six to 12 months that was previously the norm.

An all-time hig