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Carl Beardsley, senior managing director and data centers leader for JLL Capital Markets, told RCRTech that demand for capacity between now and 2027 is in “extreme demand nationwide,” with vacancy levels at an all-time low
In sum – what to know
Demand remains extreme – JLL expects vacancy to remain near 1% through 2028, while demand for data center capacity through 2027 remains exceptionally strong.
Power drives migration – Frontier markets account for 77% of capacity under construction as established markets face constraints delivering power in the near term.
Financing stays flexible – AI and other non-credit tenants are securing financing through credit support, tenant contributions and creative deal structures.
Power availability is increasingly shaping where new data center capacity is being developed across North America, with constrained established markets pushing development toward newer locations, according to JLL.
More than 66 GW of data center capacity is under construction across North America, with 77% of that capacity located in frontier markets, according to JLL’s North America Data Center Report Midyear 2026. West Texas has been the largest beneficiary of the shift, while Ohio, Louisiana, Indiana, and the Carolinas have also gained significant activity.
Carl Beardsley, senior managing director and data centers leader for JLL Capital Markets, said that the shift is being driven primarily by power availability. “This dynamic is largely due to the core markets being constrained to deliver power in the near term,” Beardsley told RCRTech.
Frontier markets can offer new capacity within a shorter timeframe, changing how customers approach location decisions. “Frontier markets are offering net new capacity in a shorter window and demand has become more of a timing consideration versus geographical market consideration,” Beardsley said.
Vacancy remains near 1%
The migration into new markets is taking place while overall demand remains exceptionally strong. JLL said data center vacancy has remained at 1% for the third consecutive year and is likely to remain near zero through 2028.
Beardsley said demand for capacity between now and 2027 is in “extreme demand nationwide,” with vacancy levels at an all-time low. He added that leasing requirements have become increasingly location agnostic.
“The demand is only increasing, upcoming supply is becoming more challenged and therefore rental rates seeing upward trajectory week to week,” Beardsley said.
JLL said available capacity is generally limited to small, fragmented blocks, while most tenants securing space today are contracting for deliveries in 2028. The report describes this as evidence of continued forward demand despite the unprecedented amount of construction underway.
Operators address community concerns
As development expands into markets that have historically hosted little data center capacity, operators are also addressing concerns around power, water, land use, and other community impacts. Beardsley said operators are responding through early engagement, transparency and infrastructure investment.
According to Beardsley, the industry has transitioned from old evaporative cooling systems to closed-loop systems that recycle water and reduce consumption to single-digit percentages of previous usage. He also said many facilities now use air cooling, which nearly eliminates water consumption.
Power infrastructure is another focus. Beardsley said developers are paying for infrastructure upgrades themselves through upfront payments and long-term power purchase agreements with utilities, rather than having those costs fall on ratepayers.
Developers are also increasingly deploying behind-the-meter solutions, onsite natural gas generation and battery energy storage systems to reduce reliance on the grid, according to Beardsley.
Operators are also investing in the physical design of facilities, including landscaping, tree buffers, setbacks and sound mitigation for generators and cooling equipment. JLL said the expanding data center buildout is bringing investment, jobs, economic diversification and property tax revenue to host communities.
