In the second half of 2023, the New York Tri-State area experienced a record-low vacancy rate of 6.5% in data centers, a significant decrease from the previous rate of 9.8%. This was primarily driven by strong demand from AI operators, as reported by CBRE. Rental rates also saw an increase to $130-$150 per kW for monthly requirements ranging from 3-10 MW.
The report highlights New Jersey’s robust demand for data centers, with pricing per kW rising by over 20%-30%. Publicly traded operators are seeking higher prices due to increasing capital costs and delays in expansion plans caused by power procurement issues lasting up to two or three years.
AI companies have pre-leased more than 40 MW in H2 of 2023 and continue expanding their operations. Notable activities include QTS completing leasing agreements in Piscataway, NJ and pre-leasing space in East Windsor, NJ. Equinix has acquired a building in Secaucus,NJ while Databank’s facility located at Orangeburg,NY is fully leased with plans for further expansion up to30-MW.
The rental rates for data centers have climbed significantly during H2 ’23 especially within New Jersey where they rose more than thirty percent according Connect CRE reports.
