Chapter 8

Silicon Valley Data Center Market

North America Data Center Trends H1 2026

3 Minute Read

Occupier demand continues to increase rental rates to record-high levels, with providers commanding premium pricing for deployments offering near-term occupancy and available power.
Inventory remains extremely limited and vacancy rates continue to hover near historic lows.
Preleasing has become standard practice, with a significant share of new capacity committed long before delivery.
Expansion rights have become increasingly important as occupiers seek to secure long-term capacity in a market with dwindling supply.

Demand from hyperscale, cloud and AI-related occupiers continues to outpace new supply, further intensifying competition.
Powered shell development is becoming more prevalent, reflecting the need to accelerate delivery timelines and provide greater design flexibility for large-scale users.
Limited land availability, power constraints and lengthy development timelines continue to slow the delivery of new supply.

The City of San Jose selected Prologis to develop a 159-acre site owned by the municipality, where the developer is planning a large-scale data center campus comprising four 99-MW facilities.
Prologis is also moving forward on a 99-MW data center development in South San Jose, further expanding the region’s development pipeline.
Microsoft started construction on a new data center project in North San Jose that is expected to deliver between 49 MW and 99 MW of capacity.
CoreSite acquired three office properties zoned for data center redevelopment from an affiliate of GI Partners.
Equinix acquired approximately 16 acres next to its Great Oaks campus in South San Jose for future expansion.