The latest CommercialCafe report takes a closer look at the backbone of our rapidly growing digital economy: data centers. To get a handle on this growth, our team analyzed data center sales activity and construction data from 2015 through 2024 in 94 U.S. markets and ranked the top 20 markets by transactions and development. Among the highlights: Phoenix ranks among the Top 10 U.S. data center markets by sales volume.

Key Takeaways

• Northern Virginia, within the Washington, D.C. market, leads in active data center development, with nearly 6 million square feet currently being built.
• Atlanta and Phoenix are hot on its heels, with 5.2 million and 4.9 million square feet underway, respectively. Here, developers are cashing in on tax breaks and cheaper energy compared to coastal regions
• The Midwest is gaining traction, too: From 2015 to 2024, Columbus, Ohio, added 6.1 million square feet and Des Moines, Iowa, increased by 5.6 million, thanks to reliable power grids and affordable land. Only Northern Virginia and Dallas have built more.
• The $709 million Cloud Plaza sale in Ashburn, Va., marks the decade’s largest single-asset data center deal.

Demand for cloud services, AI infrastructure and hyperscale computing has skyrocketed, sparking a major expansion in U.S. data center construction in the last year. Notably, Northern Virgina (NoVa) – the core of the D.C. market’s data center scene – remains key. Meanwhile, newer markets — like Atlanta, Phoenix and Dallas — are gaining ground fast, attracting billions in investment with lower costs, plentiful power and tempting policy incentives.

Phoenix Takeaways

• From 2015 to 2024, the Phoenix data center market recorded $511.3 million from 10 transactions, covering 2.5 million square feet.
• Phoenix added 2.71 million square feet of new data centers evenly throughout the last decade.
• In Phoenix, nearly 5 million square feet of data center space are currently under development, which could increase the market’s total inventory by as much as 57% upon completion – the nation’s 3rd-largest pipeline.
• With over 6.8 million square feet of data center space is in its inventory, Phoenix placed 5^th as of the end of 2024.

To get a handle on this growth, we dug into the 94 largest U.S. data center markets by zeroing in on four main areas — active construction pipelines, inventory growth from 2015 to 2024, a decade of investment trends and the largest deals of the last 10 years.

Northern Virginia Leads The 2025 Construction Race, But Atlanta & Phoenix Accelerate To Narrow The Gap

In the Northern Virginia corridor (part of the Washington, D.C. – suburban Maryland market), nearly 6 million square feet of data center space is under construction — the nation’s largest pipeline. More precisely, in the “Data Center Alley” in Ashburn, Va., nine of 14 active projects are underway, including Stack’s flagship 1-million-square-foot hub. Plus, with more than 200 data centers already operating, this market’s inventory dwarfs others by twofold. But, the local grid is strained and space is running low, which is pushing developers into nearby counties, such as Fredericksburg and Springfield. And, while Dominion Energy is adding new transmission lines, the region’s growth still struggles to match national demand.

Atlanta isn’t far behind, with more than 5 million square feet under development across 14 projects, accounting for a 63% increase in total inventory once completed. Developers are building bigger, more advanced facilities than the current average, thanks to plenty of available land and a supportive local government. In this case, tax incentives and light regulations have drawn heavyweights like Microsoft and QTS, each advancing multiple projects. Although this boom pressures the power grid, planned renewable energy from Vogtle should help stabilize supply. In fact, in 2024, Atlanta even surpassed Northern Virginia as the top U.S. market for data center absorption, according to CBRE.

Out west, Phoenix is another key market benefiting from the rapid expansion of data center space outside of Northern Virginia. Nearly 5 million square feet of data center space are currently under development, which could increase the market’s total inventory by as much as 57% upon completion. Leading this growth are hyperscalers — large technology companies like Meta and Vantage, known for constructing large, power-intensive facilities. Meta is developing a 1.5-million-square-foot project in Mesa, while Vantage is adding 800,000 square feet in Goodyear. Here, low operating costs, a dry climate for efficient cooling and proximity to West Coast hubs fuel its appeal. Moreover, to tackle water scarcity, closed-loop systems now cut usage by 95%.

Northern Virginia’s $3.26B Decade Of Sales Dominance

From 2015 to 2024, the U.S. data center market recorded $10.83 billion in sales across 62 markets, covering 41.66 million square feet in more than 300 transactions. Now, hyperscalers like Meta focus on building custom, AI-driven facilities for long-term use, rarely selling them. Accordingly, this shift has boosted colocation providers, which lease space to industries such as finance and health care that drive most sales activity.

Once again, Northern Virginia led with $3.26 billion in sales across 40 deals to account for 30.1% of U.S. volume despite claiming only 13% of transactions. Its proximity to Washington, D.C. and role as an internet hub make it a colocation powerhouse for immediate needs.

Other markets stood out, too. For instance, Dallas, Atlanta and Phoenix saw robust sales from scalable demand. And Houston, tapping its energy resources, posted $765.8 million in just seven deals, including three of the decade’s top 20 property sales. At the same time, Los Angeles, with sub-sea cables to Asia cutting latency, hit $651.5 million across seven transactions. Lastly, the Bay Area, New Jersey, and Chicago also delivered strong results, fueled by tech, finance and connectivity strengths.  – more at azbigmedia.com