Data center market continues record growth

The data center market continued record growth in the first half of the year, defying early 2025 turbulence, according to a new report from JLL.

After early 2025 concerns around DeepSeek and tariffs prompted concern over a possible AI bubble, market fundamentals have only strengthened, JLL’s North America Data Center Report – Midyear 2025 says. Vacancy in the sector is at a record low, 2.3% with 8 GW of colocation capacity under construction—73% of which is preleased. Rent growth has averaged 12% CAGR over three to five years.

“We’re seeing unprecedented demand dynamics that are fundamentally reshaping how we approach site selection, financing, and development timelines,” says Andrew Batson, Head of U.S. Data Center Research at JLL.

The most significant development in the data center market is the utility sector’s response to overwhelming demand. The new reality requires developers to secure power commitments years in advance, fundamentally altering project timelines and capital deployment strategies. 

Utilities’ new stance has effectively eliminated speculative land plays while accelerating adoption of behind-the-meter natural gas generation as an interim solution. The power procurement challenge has also sparked innovation in energy partnerships, with successful projects featuring oversized generation facilities that contribute excess capacity back to local grids.