Charlotte, NC: Data Center Construction Skyrockets, Setting New Records

Charlotte, NC: Data Center Construction Skyrockets, Setting New Records

In a stunning shift for the tech landscape, Charlotte and Raleigh, North Carolina, are experiencing a remarkable surge in data center construction. With an impressive 113.4 megawatts (MW) of data center space currently underway, we’re witnessing a construction boom that completely eclipses previous records, outstripping the former peak by more than 15 times. This data comes from the latest North American Data Center Trend Report released by a major commercial real estate firm.

Unprecedented Growth in the Region

The first half of 2024 has brought a wave of development activity, and approximately 90% of the new space under construction is already preleased. This places the Charlotte/Raleigh area among the pioneers in this high-demand sector, being one of only two secondary markets in the country where the construction of data centers outpaces the available online capacity. The other contender is Austin/San Antonio.

If all the projects currently underway were to be finished overnight, Charlotte/Raleigh would become the fourth largest secondary data center market in North America. This would include surpassing prominent areas like Southern California and Seattle, a remarkable jump from its current ranking as eighth.

Why is This Happening?

According to Ben Rojahn, a vice president specializing in data center solutions, “The Carolinas are seeing tremendous demand from developers and end users as power becomes more challenging to procure in primary markets.” As Charlotte takes the lead with its booming development, it’s only a matter of time before nearby areas start to feel the impact of this growth, especially regions stretching from Northern Virginia to Atlanta.

With utilities like Duke Energy providing ample power capacity, the region is well-positioned to support this rapid expansion. Rojahn emphasizes their ongoing efforts to identify sites ideal for data centers that can efficiently utilize this power supply.

A Broader Look at North America

3,871.8 MW of data center space being constructed, marking a 69.2% increase from the previous year. Almost 80% of this new supply has already been preleased. Despite the exciting news about expanding capacity, some challenges remain, particularly a shortage of available power and delays in new electrical infrastructure which can slow down project completion times.

Pat Lynch, the Executive Managing Director and Global Head of Data Center Solutions, noted that “the trend has been consistent over the past two years: Demand for data center capacity far exceeds supply.” The continued high demand is expected to drive pricing upward as businesses scramble to secure the available space.

Marking New Milestones

Interestingly, the Charlotte/Raleigh area recently absorbed 5.4 MW more than what was added year over year. Across the country, notable markets have emerged, with Northern Virginia reigning as the largest data center market, despite a slight drop in absorption rates. Meanwhile, areas like Hillsboro, Oregon, and Phoenix saw spectacular leasing activity, with respective absorption rates increasing 120% and 238% year over year.

Looking Ahead

As we gear up for 2025, several trends are anticipated to shape the data center industry. From emerging development markets taking advantage of tax incentives, to advancements in renewable energy and power availability, the sector is continually evolving. Additionally, the rise of artificial intelligence is prompting operators to reconsider site selection, moving beyond traditional business districts as developers adapt to these new needs.

In conclusion, the booming data center construction in Charlotte and Raleigh highlights a bright future for the region, transforming it into an epicenter for data and technology. As demand continues to rise, there’s no doubt that these Carolinas towns are set to play a pivotal role in the future of data supply—and the nation will be watching closely.