The Silicon Valley data center market continues to grow, but momentum has slowed in the first half of 2023 due to economic challenges and limited supply, according to a new report from CBRE. Inventory was 410.7 megawatts (MW) in H1 2023, up 10% year-over-year; however vacancy increased from 2.3% in H2 2022 to 6.4%. Despite this rise, rental rates remain among the highest nationwide as almost 60% of new construction was pre-leased during the same period.
Jerry Inguagiato SVP at CBRE commented: “While vacancy and inventory increased, Silicon Valley’s data center market remains one of the tightest across America due largely power constraints and aging supply which severely limit desirable options while keeping asking rental rates high.” He went on further noting that newly constructed facilities are quickly being pre-leased indicating strong demand for state-of-the art infrastructure solutions within this region
