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A new JLL report said the geographic shift could allow Texas to overtake Virginia as the world’s largest data center market by 2030
In sum – what to know:
Vacancy holds at record 1% – Supply remains extremely tight across North America, with most new capacity already pre-leased years in advance.
Frontier markets take majority of pipeline – About 64% of the 35 GW construction pipeline sits outside traditional hubs, with Texas alone accounting for 6.5 GW.
AI and hyperscalers drive $710 billion capex – Massive investment plans are accelerating construction while exposing power and grid-connection constraints.
A new North America data center report from JLL indicates the sector has reached a turning point, with record-low vacancy and a growing share of new capacity being built outside traditional hubs. The study shows vacancy holding at 1% for the second consecutive year, while 64% of the 35 GW construction pipeline is now located in emerging or “frontier” markets.
JLL said the geographic shift could allow Texas to overtake Virginia as the world’s largest data center market by 2030. The firm currently tracks 39 GW of active capacity across North America, split roughly evenly between leased facilities and hyperscaler-owned sites.
“The data center sector has officially entered hyperdrive,” said Andy Cvengros, executive managing director, co-lead of U.S. data center markets at JLL. “Record-low vacancy sustained over two consecutive years provides compelling evidence against bubble concerns, especially when nearly all our massive construction pipeline is already pre-committed by investment-grade tenants. This structural change is driven by hyperscale and AI demand and development headwinds that will likely keep vacancy near zero for the next several years.”
Available space remains limited, with most tenants now signing contracts for capacity scheduled to come online in 2027 or 2028, the JLL report stated.
Texas alone accounts for 6.5 GW of capacity under construction, while other emerging markets such as Tennessee, Wisconsin, and Ohio are attracting projects thanks to power availability, land supply and business-friendly conditions. JLL is tracking more than ten data center projects of 1 GW or larger currently under construction.
Supply constraints are also pushing rents higher. Data center rents rose 9% in 2025, in line with a five-year compound annual growth rate of 10%, with larger deals seeing increases of up to 13%.
“With record low vacancy across North America, we are conservatively forecasting rent growth at a 7% CAGR through 2030,” said Andrew Batson, global head of data center research at JLL. “With rents up 60% since 2020, landlords are capturing significant rent spreads on renewals while tenants continue to experience pronounced sticker shock on new leases. Most leases being executed today include annual escalations of 3% or more, with little to no concessions.”
Hyperscalers continue to drive investment. The five largest companies have announced a combined $710 billion in planned capital expenditure for 2026, enough to support about 35 GW of new or refreshed capacity worldwide. Pure-play AI companies were linked to roughly 10 GW of project announcements in 2025, while neocloud providers leased about 1 GW, according to the report.
However, the surge in demand is colliding with power constraints, with grid connection timelines averaging four years or more. Developers are increasingly working with utilities on interim solutions such as phased power requirements or backup generation, JLL added.
“Developers that collaborate with utilities on innovative solutions, such as flexible load profiles, phased power requirements or backup generation, can often expedite their grid connections,” said Matt Landek, global division president, data centers and critical environments at JLL. “The industry is rapidly adopting interim power strategies as companies work to close the gap between immediate capacity needs and grid infrastructure timelines. Major hyperscalers and leading operators have achieved carbon-neutral data center operations through comprehensive renewable energy procurement, demonstrating how sustainability mandates increasingly drive location decisions, facility design and operational strategies.”
