Is DFW the Top Data Center Market In Texas?
- Logan Meyers
- May 5
- 2 min read
Dallas-Fort Worth (DFW) has firmly established itself as the premier market for data center development in Texas, outpacing other regions in growth, infrastructure, and investment.
Unprecedented Growth and Demand
In 2023, DFW experienced a record-breaking absorption of 386 megawatts (MW) of data center space, a nearly sevenfold increase since 2020. This surge is driven by escalating demand from cloud services, artificial intelligence (AI), and machine learning applications. The region's vacancy rate has plummeted to an all-time low of 3.73%, highlighting the intense competition for available space. [1]
Robust Development Pipeline
DFW's data center market is poised for continued expansion, with 605.6 MW of colocation space currently under construction, 87% of which is pre-leased. This development is expected to double the market's size by the end of 2026, solidifying DFW's position as a leading data center hub. [2]
Strategic Advantages
Several factors contribute to DFW's dominance in the data center sector:
Central Location: DFW's position in the central United States offers low-latency connectivity across the country.
Affordable Power: With average power rates around $0.06 per kilowatt-hour, DFW provides cost-effective energy solutions for data centers. [3]
Business-Friendly Environment: Texas offers tax incentives and a regulatory climate conducive to large-scale data center operations.
Infrastructure Readiness: The region boasts a robust power grid and extensive fiber networks, essential for data center functionality.
Major Investments and Developments
Leading tech companies are investing heavily in DFW:
Google: Building a $330 million data center in Red Oak, with plans to expand further. [4]
QTS Realty Trust: Embarking on a $220 million expansion of its Fort Worth data center. [5]
Meta: Operating a massive data center campus in Fort Worth, powered entirely by renewable energy. [6]
AWS: Developing a new facility in DeSoto, enhancing its presence in the region. [7]
Conclusion
With its strategic location, favorable economic conditions, and substantial infrastructure, Dallas-Fort Worth stands out as the top market for data center development in Texas. The region's rapid growth and significant investments from industry giants underscore its critical role in supporting the nation's digital infrastructure.
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Sources:
[1] Compass Datacenters+2Cushman & Wakefield+2Data Center Dynamics+2Compass Datacenters+1Data Center Dynamics+1Data Center Dynamics
[3] Data Center Dynamics
[7] Contentful
It seems like DFW and Texas in general are the most "no brainer" areas for Data Center development. Honestly feels like in 10-15 years, Texas will surpass Virginia as the biggest market for Data Centers in the US.