The vacancy rate for colocation data centers across the United States is nearing 0%, according to the latest research from JLL.

And don’t expect much relief in the future. JLL reported that the construction pipeline of 8 gigawatts is 73% preleased. This means that any significant uptick of vacancy rates remains years away. JLL predicts that even if preleasing activity slows significantly in the near-term, data center vacancy rates would likely remain below 5% through 2027.

And the more likely scenario? JLL predicts that vacancy rates will remain in the 2% range through 2027 in this key sector.

This means that companies hoping to expand their data center operations might be limited to preleasing in new developments, a move that could be followed by a year or more of waiting for construction to be completed before these end users can take occupancy.

Because of this lack of supply, some data center development has been moving into secondary and tertiary markets. JLL, though, says that these emerging markets are only capturing a fraction of colocation demand. Demand for colocation space remains concentrated in core markets such as Northern Virginia and Dallas.

During the first half of 2025, 50% of the absorption recorded in data centers came in those two above markets. Rounding out the top five markets for absorption in the first half were Chicago, which saw 368 megawatts of absorption; Austin/San Antonio, which recorded 291 megawatts of absorption; and Atlanta, with 150 megawatts.

How strong is demand for data center space? JLL reported that the data center sector’s market cap growth was 161% from 2019 through the first half of 2025. That’s second only to the industrial sector, which saw market cap growth of 163% during the same time. Coming in third place was the strip center sector with a market cap growth of 110%, followed by self-storage at 80% and healthcare at 35%.