Dallas-Fort Worth witnesses a rapidly expanding data center market, with strong demand and extremely tight fundamentals

The DFW data center market is a hotbed of activity and has emerged as one of the top US data center markets, ranking 4th behind Northern Virginia, Atlanta, and Phoenix. Since 2020, DFW's data center supply has expanded by a staggering 200%, growing from 710 MW* to almost 1,650 MW today. This surge is driven by the growth of the colocation sector, where companies rent data center space to operate their own servers and network infrastructure. This trend has been fueled by the increasing demand for cloud computing, artificial intelligence, and big data analytics.

Despite the significant increase in supply, absorption has more than kept pace. In 2023, demand totaled 478 MW, with 2024 showing no signs of slowing, with 168 MW absorbed as of mid-year. This high demand has resulted in a decrease in market vacancy, from near 19% in 2020 to a mere 1.4% today. This makes DFW one of the tightest data center markets in the country. The region's diverse and extensive tech and telecom roots provide a strong foundation for data center operations.

Additionally, DFW's affordability is a major draw, with power rates significantly lower than those in top markets like Phoenix and Northern Virginia. This is especially important as AI requirements, with their higher power needs, continue to expand. A critical factor in DFW's favor is its "time-to-power" advantage. Thanks to the work of Oncor in the region, DFW can get power transmission to a site in a mere 18 months, compared to 36 months in Northern Virginia and Silicon Valley.

This significant reduction in time-to-power makes DFW an attractive option for data center operators looking to quickly deploy new facilities. As the demand for cloud computing, AI, and big data analytics continues to grow, DFW is well-positioned to meet the needs of data center operators.

* Data centers use power to measure everything, not square feet. Lease terms are in kW (Kilowatts) or MW (Megawatts). The estimate is every 10,000 sf of a data center hall equals 1 MW of power (pre-2022 builds)