Strong demand for data and technology capacity fueled the wholesale data center market in North America in 2018, according to CBRE.
Surging demand from hyperscale cloud providers led to a record 303 megawatts (MW) of absorption in the seven primary U.S. data center markets — Atlanta, Chicago, Dallas/Fort Worth, New York Tri-State, Northern Virginia, Phoenix and Silicon Valley.
Development pipelines ramped up in primary markets to more than 500 MW. To put the scale of development activity into perspective, the amount of under-construction capacity in Northern Virginia is more than the existing inventory of any data center market in the United States.
North American data center investment volume totaled more than $12 billion in 2018. As investment in single assets and portfolios increased, capitalization rates for stabilized data centers approached rates for industrial properties, typically ranging from 5.5 percent to 7.5 percent.
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