The U.S. data-center sector flourished in 2021, year-over-year, primary data-center markets cumulatively logged a 50-percent increase in net absorption, a 17-percent increase in total supply and a 195-percent surge in capacity under construction, according to CBRE. Cloud providers and social media companies powered much of this growth to support their expanding digital infrastructures.
Challenges loom. Rising interest rates could weigh on cap rates and constrain providers reliant on debt financing. Pressure is growing to limit the environmental impact of data centers, and older facilities could face headwinds as users seek the latest sustainable technologies to increase reliability and efficiency. Nonetheless, the outlook for 2022 is bright as vacancy rates remain low in most markets amid robust demand from users of all types.
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