U.S. Data Center Market Continues Momentum Despite Pause in Absorption

Article originally posted on HERE on May 13, 2025

The U.S. data center market has entered 2025 with remarkable momentum despite a cyclical pause in national absorption, Avison Young reported. Driven by sustained demand from AI and cloud users, the market continues to experience record-low vacancy rates. The trend persists even as supply struggles to keep pace with the growing needs of the industry.

On a regional basis, Texas markets, particularly Dallas/Fort Worth, have surged ahead in leasing activity, showcasing robust growth. Additionally, Las Vegas and Boston have posted record growth, highlighting the dynamic nature of regional markets, according to Avison Young.

“Recent project cancellations by Microsoft and AWS, while making headlines, reflect the hyperscale norm of over-allocating capacity for future needs,“ said Howard Berry, principal, director, Data Center Solutions at Avison Young. “These decisions are strategic rather than indicative of market contraction. Vacated sites are typically absorbed by other operators or tenants, and the data center sector continues its robust growth trajectory.“