Metro Phoenix’s data center capacity grew by 150.8 megawatts (MW) in the first half of 2024, increasing its total inventory to 510.0 MW, a 44% year-over-year rise. This pushed Phoenix ahead of Silicon Valley, making it the fourth largest data center market in North America. With 334.3 MW under construction, Phoenix’s growth shows no signs of slowing down. The vacancy rate decreased to 3.3%, driven by high absorption and firm rental rates, which rose up to 20%. Across North America, new supply increased data center space by 10% in major markets. Rising costs and power demands are expected to drive further market expansion into tertiary areas like Northern Indiana and Kansas.
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A full-service lease is a lease that has one, all-inclusive rental rate which includes both the base lease rate and the operating expenses combined into one figure.
A modified gross lease is a lease where the tenant pays base rent at the lease’s inception, but it takes on a proportional share of some of the other costs associated with the property as well, such as property taxes, utilities, insurance, and maintenance.
A triple net lease is a lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property, including real estate taxes, building insurance, and maintenance. These expenses are in addition to the cost of rent and utilities.
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