2021 DATA CENTER REAL ESTATE ACQUISITIONS REPORT
2021 Was a Banner Year For Data Center Real Estate
Data center real estate acquisition activity for 2021 yielded approximately $4.56 B of real estate transactions totaling 11.4 M total square feet. In comparison, 2020 full year activity was $1.7 B of transactions and 5.54 M total square feet.
Total activity bounced back substantially after a slower 2020 due to the beginning of Covid-19. A flush of new capital has entered the market over the past year seeking data center real estate investment opportunities leading to continued cap rates compression for well-leased data centers in Tier 1 and Tier 2 US markets. Interest rates are rising heading into 2022 which will increase borrowing costs for acquisitions and new construction projects.
Leasing activity remained healthy in 2021 with strong leasing demand in major markets from the technology sector including Amazon (AWS), Facebook (Meta), Nvidia, Twitter and Microsoft with lease committments getting larger. Several wholesale data center lease committments from technology companies exceeded 30 MWs in certain markets.
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