North America’s data center market is operating at near-full capacity for the second year in a row, with vacancy holding at just one percent despite record construction activity, according to JLL’s North America Data Center Report Year-end 2025.
The report shows that total inventory has reached 39 gigawatts (GW), split evenly between 19 GW of leased capacity 20 GW of hyperscaler-owned facilities. All the while, 35 GW is currently under construction, and 92 percent of that pipeline is already pre-committed through leases or owner-occupied development.
This level of preleasing challenges prevailing concerns about a potential bubble, according to the report. With 99 percent occupancy and most new capacity already taken up, JLL projects vacancy will remain in the low single digits through 2030.
A significant shift highlighted in the report is the geographic redistribution of development. About 64 percent of capacity under construction is in frontier markets rather than traditional hubs.
Markets such as West Texas, Tennessee, Wisconsin and Ohio are emerging as major beneficiaries of hyperscale and AI-driven expansion. Texas, when seen as a single market, is potentially poised to overtake Northern Virginia as the world’s largest data center market by 2030, supported by abundant land, available energy resources and a business-friendly environment.
This shift signals growing pressure on regional utilities, permitting processes and skilled labor pipelines in markets that historically have not supported hyperscale deployments.
Hyperscalers now make up approximately 65 percent of all North American data center demand, reflecting the rapid buildout of AI infrastructure.
Looking ahead, the top five hyperscalers have announced $710 billion in planned 2026 capital expenditures, which is enough to support roughly 35 GW of new or refreshed capacity globally, according to the report.
At the same time, enterprise demand from sectors such as finance, media and healthcare has declined as cloud migration continues. Pure-play AI companies and emerging “neocloud” providers are adding incremental demand, often in nontraditional markets.
With supply constrained, rents increased nine percent year over year in 2025 and are up roughly 60 percent since 2020. Larger deployments, greater than one megawatt (MW), saw an average listing rate of growth of 13 percent compared with four percent growth for sub-one MW deals.
Power availability remains a gating factor. Grid interconnection timelines average four years or longer in most regions, pushing developers to negotiate phased load strategies, deploy onsite natural gas generation and incorporate battery energy storage systems. However, the report notes that grid connection remains the preferred long-term outcome for most projects.
Overall, grid constraints, long interconnection timelines and the growing use of onsite generation and battery storage are reshaping how projects are designed and delivered. As frontier markets absorb most new development, regions once considered secondary are quickly becoming central to the continent’s digital backbone.
Jeff Wardon, Jr., is the assistant editor of the facilities market.
