- Texas is projected to overtake Virginia as the world’s largest data center market by 2030.
- About 64% of North American data center capacity under construction is in new, nontraditional markets.
- Record-low 1% vacancy rates persist, fueling robust rent growth and long-term commitments.
- Rents for data centers climbed 9% in 2025, with further 7% annual growth forecasted through 2030.
Texas Gains Data Center Leadership
CoStar reports that Texas will surpass Virginia as the world’s largest data center market by 2030. JLL highlighted the shift in its 2025 North America Data Center report. The change marks a major realignment in global data center development.
Surging demand for artificial intelligence drives much of this growth. Texas also offers abundant land and reliable energy access. Developers currently have 6.5 gigawatts of capacity under construction across the state.
JLL credits Texas’ rise to plentiful power, lower land costs, and strong transmission infrastructure. These advantages attract operators building large-scale digital campuses. As a result, Texas has become a top destination for new data center investment.
AI, Energy, and New Market Expansion
Artificial intelligence growth has prompted developers to move beyond traditional hubs, resulting in 64% of new data center construction happening in locations like West Texas, Tennessee, Wisconsin, and Ohio. These frontier markets benefit from business-friendly environments and abundant renewable energy sources such as solar and wind.
Meanwhile, power constraints in Virginia continue to strain development pipelines. In Northern Virginia, operators are even redeveloping a former professional football stadium site to expand data center capacity, underscoring how tight supply has become in legacy hubs. These limitations have prompted tenants and operators to seek alternatives, reinforcing Texas’ electricity advantages.
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Rental Growth and Investor Trends
Available data center space remains scarce, with North America’s vacancy rate holding at a record-low 1%. This ongoing shortage is supporting a historic rent surge—data center rents increased by 9% in 2025, and listings above 1 megawatt saw premiums up to 13%.
JLL forecasts continued momentum, predicting annual rent growth of 7% through 2030. Lease agreements increasingly include yearly escalations above 3%, with fewer concessions offered to tenants as demand outpaces supply.
Why It Matters
With power and land availability reshaping the industry, Texas and other emerging regions are displacing legacy data center corridors. JLL’s analysis finds that the majority of current and planned data center projects—many exceeding 1 gigawatt—are already pre-committed by investment-grade tenants, pointing to sustained industry demand and profitability.
