Institutional rotation into data centers & power-constrained niches
Key Questions
What is the current vacancy and pre-leasing status of the US data center market?
The US data center market reports a 1.4% vacancy rate with 89% of space pre-leased. Hyperscalers represent 10% of recent leases amid strong demand from AI and edge computing players.
What are Prologis' financial targets and activities in the data center sector?
Prologis is pivoting to data centers with projected targets of $10.2B revenue and $3.6B earnings by 2029, alongside $1.3B in new starts. The firm is also participating in EPRI-NVIDIA pilots for micro data centers.
How are power constraints impacting data centers and related industrial sectors?
Power constraints are limiting warehouse automation leases and slowing broader industrial activity, with average rents at $10.01 per square foot. This dynamic is driving interest in distributed and micro data center solutions to ease infrastructure strain.
What details are available on Applied Digital's recent data center lease?
Applied Digital secured an $18.2B AI campus lease covering 400MW in North Dakota, representing one of the largest deals in the current AI cycle.
What policy risks are emerging for data center development?
A business sign-on letter is circulating in support of temporary data center moratorium legislation, highlighting growing regulatory concerns over power usage and community impacts.
1.4% US vac/89% pre-leased; hyperscalers 10% leases; Prologis data center pivot with $10.2B revenue/$3.6B earnings targets by 2029 and $1.3B starts; edge AI/Fluence/Aligned/AWS/Hut8; power constraints; micro data centers via EPRI-NVIDIA-Prologis pilots. Statewide data center moratorium sign-on letter emerges as key policy risk. New: Applied Digital $18.2B/400MW ND lease.