Atlanta’s data center market leads U.S. growth
Writer: Eleana Teran
May 2024 — Atlanta is becoming a hotspot for data center development, with a surge in leasing activity and numerous construction projects in the pipeline, but environmental and other concerns could slow progress.
According to a CBRE report, Atlanta’s data center market is the fastest-growing in the United States, with a 211% increase in projects under construction between 2022 and 2023. This growth rate is unmatched nationwide, cementing Atlanta’s role as a critical player in data infrastructure. While Atlanta accounts for only 6% of the primary market inventory for data centers, the city has a lot of projects that are planned or under construction.
Several major projects signal a robust future for Atlanta’s data center market with several announcements over the past month. Microsoft has aggressively expanded, recently acquiring 160 acres in south Fulton and Fayette counties for $56 million, totaling nearly 320 acres this year. This expansion is part of Microsoft’s broader strategy to bolster its data center footprint, even as its planned corporate campus in the city’s Westside remains on hold.
In Fairburn, Bohannon Road Venture LLC, a subsidiary of Strategic Real Estate Partners, proposed a new data center project. This development will span 1.2 million square feet across three two-story buildings on 60 acres. The city established regulations for data centers earlier this year due to increased interest in developments. The Fairburn data center’s property will need to be rezoned and it’s expected to be completed in 2028, with the first building expected to come online in 2026.
Discussing the regional impact of these developments, Jeffrey Turner, chairman of the Clayton County Board of Commissioners, highlighted the spillover effects. “We’re targeting tech companies and data centers, a key growth area for many counties and cities. With Henry County developing a major data center near our border, we anticipate some of that growth spilling into Clayton County as well,” he said in an interview with Focus:. Other notable projects include DC Blox’s 216-megawatt data center in Conyers and STACK Infrastructure’s plan for two data centers in Lithia Springs. Additionally, a major hyperscaler is seeking 4,000 megawatts in Atlanta, indicating continued strong demand.
Despite the boom, data centers face scrutiny for their substantial land, power, and water consumption, while providing limited employment opportunities. Communities benefit from infrastructure upgrades, but balancing digital infrastructure with residential or commercial growth remains crucial.
“The demand in these markets has grown tremendously. In particular, our advanced tech market, especially data centers in the Southeast, has seen substantial growth due to power and tax incentives,” Kali Bonnell, business unit leader in Atlanta for DPR Construction, told Focus:.
Proposed legislation could limit where data centers are built in Atlanta. A bill could potentially prohibit data center development along the 22-mile Beltline trail loop and within a half-mile of transit centers, including MARTA stations and BRT stops. Existing data centers would be unaffected, but future projects may face restrictions, potentially slowing development. Councilmember Jason Dozier, a co-sponsor of the data center bill, expressed community concerns through social media. “By prohibiting new data centers near transit and the Atlanta BeltLine, we aim to preserve these vital corridors for people-oriented priorities like housing, retail, transportation, and green spaces,” he stated.
As Atlanta continues to grow as a data center hub, balancing development with community needs and regulatory frameworks is crucial. The city’s ability to attract significant investments from tech giants underscores its importance in the digital age.
“The burgeoning energy demand, driven by advancements in AI, makes the development of efficient data centers crucial. It’s more cost-effective to build new, technologically advanced data centers than to retrofit older buildings. This dual focus on transformational developments and data centers is not just about business growth but also about positively impacting communities and staying ahead in the technology sector,” said T. Dallas Smith, founder and CEO of T. Dallas Smith & Company, in an interview with Focus:.
For more information, please visit:
https://www.claytoncountyga.gov/
https://www.dpr.com/
https://tdallassmith.com/