The New York Tri-State area experienced a significant increase in demand for data center space during the latter half of 2023, resulting in record-low vacancy rates of 6.5%. This surge was primarily driven by AI operators and led to a notable rise in rental rates, ranging from $130 to $150 per kW for monthly requirements of 3-10 MW.
According to CBRE’s North America Data Center Trends report, this heightened demand has also caused all operators to seek higher pricing due to rising capital costs. Robert Meyers, Senior Vice President for the CBRE Data Center Solutions Group, stated that activity during this period was exceptionally strong with high demand and an increase of 20% -30% in per kW pricing.
Notable developments within the Tri-State area include ongoing construction on a fully pre-leased databank facility in Orangeburg which is set to expand by an additional building with a capacity of up to 30 MW.
This surge highlights the growing need for data center space within the region and its potential impact on rental rates as well as overall market trends.
