Georgia data centers fill up as soon as they’re built, driving demand higher

This comes as the Atlanta area is already experiencing an unprecedented amount of data center construction in recent years, which has sparked backlash across Georgia over the potential ramifications.

“It tells us demand continues to outpace supply, even with a historic amount of construction underway,” Mike Lash, an executive vice president with CBRE Data Center Solutions, told The Atlanta Journal-Constitution in a statement. “In Atlanta, a significant portion of new capacity is being committed before it ever becomes operational.”

Healthy vacancy rates for other types of commercial real estate, such as the office or industrial markets, tend to be in the high single digits. Atlanta’s beleaguered office market hovers around 25%, grappling with post-pandemic work changes, while the region’s industrial market is less than 10%.

Large data centers are a fairly new phenomenon, so comparing healthy vacancy rates is a challenge, Lash said. But what’s clear is 1% vacancy is not nearly enough.

“A healthier environment would provide enough available inventory to give users meaningful choice without creating oversupply,” he said. “That likely means vacancy modestly above current levels, while still remaining well below what would be considered typical in the office or industrial sectors.”

Extraordinary growth

Data centers are effectively gigantic warehouses that store digital information and power artificial intelligence systems.

Their size often rivals regional malls, and campuses of data centers can take years, if not decades, to build. They use copious amounts of electricity to keep servers humming around the clock, and many guzzle water to prevent those servers from overheating.

Credit: Miguel Martinez/AJC

Credit: Miguel Martinez/AJC

Atlanta emerged as the new darling of the data center industry after 2023, when generative AI platforms like ChatGPT launched publicly. The Atlanta region is now the country’s second-largest data center market behind only Northern Virginia, one of the birthplaces of the internet and digital infrastructure, according to CBRE data.

Atlanta also more than quadrupled the amount of new data center space available for companies to lease from April 2024 through March 2025, a growth rate that dwarfs its peers. Atlanta expanded 313% during that span, while runner-up Chicago grew 52%.

“That level of growth is extraordinary and is unlikely to become the annual standard for any major market,” Lash said of Atlanta. “ … Going forward, I expect growth to remain strong, although it will likely become more measured and increasingly driven by power availability.”

Georgia Power, the state’s largest utility, is undertaking one of the largest expansions of its power generation fleet in company history, largely to supply electrons to data centers. Those plans are being challenged in court by environmental and faith groups, who warn the utility’s rush to serve data centers could saddle residential customers with high bills. The utility and Republicans on the Georgia Public Service Commission say they have rules in place to protect customers.

Growing pains

The rapid proliferation of data centers in Georgia and their potential strain on utility systems have made these computer server storage facilities one of the state’s largest controversies.

Proponents say they’re critical digital infrastructure needed as part of the AI revolution, arguing they employ high-paid workers and generate lots of tax revenue. Critics say they burden power grids and water systems and take up valuable land without offering vibrancy to their neighbors.

The backlash spans rural and urban communities. Georgians have protested new projects, packed council meetings to oppose proposals and lobbied legislators to increase regulation and stop doling out tax breaks to recruit new data centers.

Credit: (Ben Gray for the AJC)

Credit: (Ben Gray for the AJC)

Data center developers and lobbyists say antagonizing the industry will only hurt Georgia in the long run, arguing that the investment will go elsewhere and leave the state lacking digital infrastructure. Lash said public opposition hasn’t diminished Georgia’s long-term attractiveness to data center operators, but it has raised the bar on which projects pass muster.

“That doesn’t stop investment but raises the expectations for how projects are planned and communicated,” he said. “Projects that demonstrate appropriate site selection, proactive community engagement and clear economic benefits will continue to be well-positioned.”

Atlanta and its North American peers are growing significantly faster than other major markets around the world, according to CBRE. The top four markets of Northern Virginia, Atlanta, Dallas-Fort Worth and Chicago have more than tripled the growth of other top international regions. Despite this, vacancy rates among existing data centers are less than 1% in North America, while it’s north of 7% in those other international markets.

CBRE data also shows 80% of data center space under construction in America’s top four markets at the end of 2025 was already preleased. That means they won’t add much vacancy even when construction ends, likely furthering demand for even more space.

“To meaningfully rebalance supply and demand, new capacity would need to come online at a pace well above today’s delivery schedule,” Lash said.

— Staff writer Drew Kann contributed to this report.