Data center vacancies hit historic lows despite record construction

The growth comes despite considerable headwinds facing data center operators, including higher construction costs, equipment pricing, and persistent shortages in critical materials like generators, chillers and transformers, CRBE stated.

There is a considerable pricing disparity between newly built data centers and legacy facilities, reflecting the premium placed on modern, energy-efficient infrastructure. Specifically, liquid/immersion cooling is preferred over air cooling for modern server requirements, CRBE found.

On the networking side of things, major telecom companies made substantial investments in fiber in the second half of 2024, reflecting the growing need for more network infrastructure and capacity to accommodate growing demand from AI and data providers.

There have also been many notable deals recently: AT&T’s multi-year, $1 billion agreement with Corning to provide next-generation fiber, cable and connectivity solutions; Comcast’s proposed acquisition of Nitel; Verizon’s agreement to acquire Frontier, the largest pure-play fiber internet provider in the U.S.; and T-Mobile’s entry into the fiber internet market via partnerships with fiber-optic providers.

In the quarter, Meta announced plans for a 25,000-mile undersea fiber cable that would connect the U.S. East and West coasts with global markets across the Atlantic, Indian and Pacific oceans. The project would mark the first privately owned and operated global fiber cable network.

Data Center Outlook