Search
 

Eight CRE Predictions for 2025

From data center growth to shadow lending to booming transactions.

By Joseph J. Ori | December 16, 2024 at 06:52 AM

The best-performing sector will be data centers

The best-performing sector in 2025 will be the data center market. The data center market has been “on fire” and has seen tremendous demand to meet the needs of enterprise providers moving from on-site applications to cloud-based information technology and artificial intelligence solutions. The global data center market is valued at $242 billion in 2024 and will increase to over $584 billion in 2032. Data center investments also have a low correlation with other CRE asset types. The vacancy rate is 3% and the net absorption of space in Q1-24 was 2,755MW (megawatts), a record. There is over 5.3MW of space currently under construction with average rents at $127-$321/kw/month and up 13%-22%, from Q1-23. The primary concern is power access as current and future data center demand has placed exorbitant strains on electricity, gas, and even nuclear power generation.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.