Another strong year of leasing activity, paired with few new deliveries, has brought Atlanta’s data center vacancy rate down to record lows, according to a new report from CBRE.

Just 3.6% of Atlanta’s 252.5 MW of data center inventory remained vacant at the end of 2022, ranking it as the fifth tightest data center market in the country behind Northern Virginia (NoVa), Central Texas, Silicon Valley, and Hillsboro, OR. For comparison, Atlanta’s vacancy was 8.3% to end 2021. Atlanta’s 33 MW of absorption was good enough to rank it 9th overall in the country for data center leasing among the 18 data center markets that CBRE tracks. 23 MW of new space was delivered in 2022.

Atlanta’s data center market will continue to benefit from power restrictions in NoVa, with over 1 GW of new planned capacity. Over 1,000 acres has been acquired around the metro area for future wholesale and hyperscale data center development, including 615 acres in Fayetteville, Georgia, where Kansas-based Quality Technology Services (QTS) plans to build the world’s largest multi-tenant data center campus.

“When my team and I facilitated the transaction of the 615 acre Fayetteville site last year, we were uncertain about the pace of demand for more land sites in metro Atlanta. Since then, multiple data center land transactions have transpired, and we have already seen a very robust demand cycle in 2023,” said Tim Huffman, Executive Vice President with CBRE Data Center Solutions in Atlanta. “The core demand drivers for Georgia are the cost and availability of power, as well as very strong state and local tax incentives.”

National Trends

CBRE’s latest North American Data Center Trends Report found that tight market conditions and escalating energy and construction costs caused primary-market average asking rents to increase 14.5% year-over-year to $137.90 per kW, the first year-over-year increase in pricing since 2017.

The seven primary U.S. data center markets* logged 686.9 megawatts (MW) of net absorption, up nearly 40% year-over-year. Despite a 17% increase in supply, vacancy fell to a record-low 3.2%. Two-thirds of the net absorption occurred in the first half of the year, as power and land constraints in certain markets, as well as construction delays, weighed on activity in H2 2022.