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Dallas-Fort Worth Data Center Market Sets Absorption Record, Posts Historic-low Vacancy, in 2023 According to Cushman & Wakefield Report

Bailey Webb • 1/19/2024
Driven by AI/ML and Growth in Cloud Computing, Data Centers are CRE’s Best-Performing Asset Class in U.S. and Globally

DALLAS – The Dallas-Fort Worth data center markets reported record absorption of 386 Megawatts in 2023, a nearly 7X increase over 2020, driven by exponential growth in cloud computing and AI/Machine Learning, Cushman & Wakefield’s 2023 Dallas-Fort Worth Data Center Report indicates.

With vacancy at an all-time low of 3.73%, colocation rents and data center land prices continue to rise in Dallas-Fort Worth. Despite a robust construction pipeline – 1.4 million square feet that can provide 225 MW – the vast majority of the market’s new data center supply for 2024 and 2025 has been pre-leased. Cloud providers securing large campuses through pre-leasing and AI/ML companies leasing the market’s few remaining pockets of available space are the primary drivers of DFW’s record demand.

“Data centers are the backbone of our economy and daily lives, from cloud computing that supports remote work and collaboration to ever-present mobile devices and social media,” said Ali Greenwood, Cushman & Wakefield Executive Director. “With continued, strong growth on the horizon, the DFW market will continue to be a leader in the data center sector but not without challenges, especially around utility constraints.”

Added Bo Bond, Cushman & Wakefield Executive Managing Director, “Data centers are currently the strongest performing asset class in commercial real estate, with billions of dollars of institutional and private capital allocated for new development and investment. Even though permitting and development is a complex process, with the demand locally and globally, we can’t build data centers fast enough. Dallas-Fort Worth will capture more than its share of that investment, with the largest concentration of new development in the southern sector of the region, driven by land availability and Oncor’s commitment to expand power infrastructure there.”

At year-end, Dallas-Fort Worth had 4.5 million square feet of data center space, offering 663.9 MW. Available turnkey space was only 177,691 square feet, with 24.73 MW. Average power rates at year-end were $0.06 per KWh, while average wholesale rental rates were $110 kW+E.
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2023, the firm reported revenue of $9.5 billion across its core services of property, facilities and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), sustainability and more. For additional information, visit www.cushmanwakefield.com.

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