The data center sector shifts into hyperdrive
Insight
17 February 2026
North America Data Center Report Year-end 2025
Vacancy remains at 1% for a second consecutive year, a powerful statistic that challenges bubble concerns
Vacancy remains at a record low of 1% for the second consecutive year, despite unprecedented construction levels. This reflects sustained structural demand rather than cyclical imbalance.
At the same time, constrained availability is limiting the risk of overbuilding. Bubble concerns are difficult to reconcile with 99% sector occupancy, particularly given that the largest data center tenants rank among the most profitable and highest-rated companies globally.
Importantly, 92% of capacity currently under construction is precommitted, either through binding lease agreements or owner-occupied development. Taken together, these dynamics point to vacancy remaining in the low single digits through 2030.
The data center map is being redrawn; 64% of capacity under construction is located in frontier markets
More than 35 GW of data center capacity is under construction in North America, an extraordinary volume by historical standards. For context, this is roughly equivalent to the annual electricity consumption of the UK or Italy.
Of this pipeline, nearly 60% is leased, while the remaining 40% will be owner-occupied by hyperscalers. Today, 64% of capacity under construction is located in frontier markets. Key beneficiaries include West Texas, Tennessee, Wisconsin, and Ohio.
Texas, when viewed as a single market, could overtake Northern Virginia as the world’s largest data center market by 2030. Abundant energy resources, ample land availability and a business-friendly operating environment support this trajectory.
Surging investment levels reflect strong institutional confidence in the sector’s outlook
The data center sector has demonstrated increasing sophistication through more complex transaction structures, including forward sales, joint ventures, and preferred equity arrangements.
A notable example of this evolution was the uniquely structured $30 billion private capital joint venture between Blue Owl and Meta executed in 2025, highlighting the scale and complexity of modern data center transactions.
This trend toward more sophisticated transaction structures reflects the data center sector's maturation and the increasing variety of capital sources and investment strategies being deployed in the space.