Data center demand surges as supply struggles to keep pace, creating landlord-friendly market

The data center industry is experiencing explosive demand growth driven by expanding use of technology and structural shifts in how data is consumed. Developers are building, but they can’t keep up with demand, according to Principal Asset Management in a recent white paper. 

Vacancy rates are at an all-time historic low, and rents are on the rise. The amount of capital required to develop the capacity to fill forecasted demand is unprecedented in the industry. 

Those dynamics create a landlord-friendly market attractive to institutional investors looking for opportunities to diversify their portfolios with a viable alternative asset class. Advantages of the data center sector include the opportunity to invest in an alternative asset class, long-term stable cash flows from high-quality tenants, and scalabil