Data Center Investment in Atlanta
Atlanta's data center market is exploding. AI demand pushed absorption to 95MW in 2025 — double the five-year average. Cap rates compressed 50 basis points as hyperscale tenants signed 15-year deals. Power constraints are real though. Georgia Power's adding 200MW of capacity, but new builds face 18-month utility delays. If you're selling, emphasize existing power allocation and redundancy. Buyers care more about megawatts than square footage now.
Market Context
Cap Rate Range
4.8% - 6.2% for stabilized facilities, with enterprise colocation trading at the tight end and single-tenant hyperscale facilities at 5.5% - 6.2%
Current Vacancy
2.1% market-wide, effectively zero for powered shell space. Most availability is raw land or facilities under construction
Rent Trend
Colocation rates up 12% YoY to $95-140/kW/month. Hyperscale wholesale power trending $45-65/kW/month depending on term and redundancy
Absorption
95MW absorbed in 2025 vs 45MW five-year average. Microsoft, Amazon, and Google accounted for 60% of take-up
Price Per Unit Trend
$8M - $15M per MW for stabilized facilities, $4M - $7M per MW for development sites with power allocation
Transaction Volume
$1.8B in 2025, up 140% from 2024. Largest deal was QTS Douglasville expansion at $285M
Submarket Analysis
Douglasville/West Atlanta
5.2% - 5.8% capVacancy
1.8%
Avg Rent (1BR)
$110-130/kW/month for colocation, $52-68/kW/month wholesale
Hyperscale hub with 180MW operational. Georgia Power adding 75MW substation capacity by Q4 2026
OM Tip
Highlight fiber diversity — 8 carriers on-net vs market average of 4. Include utility rate projections through 2028
Alpharetta/North Fulton
4.8% - 5.4% capVacancy
0.9%
Avg Rent (1BR)
$120-145/kW/month colocation, premium for enterprise-grade
Enterprise colocation stronghold. Limited expansion due to residential proximity and zoning constraints
OM Tip
Emphasize proximity to Fortune 500 headquarters. Detail cooling efficiency — PUE matters more here than hyperscale
Forest Park/South Metro
5.5% - 6.2% capVacancy
3.2%
Avg Rent (1BR)
$85-105/kW/month, lower tier pricing
Emerging area with cheaper land and power. Three hyperscale projects announced for 2027 delivery
OM Tip
Focus on development potential and utility cooperation. Include traffic studies for truck access
Downtown/Midtown
4.9% - 5.6% capVacancy
1.4%
Avg Rent (1BR)
$135-160/kW/month, premium for downtown proximity
Edge computing and financial services focus. No large expansion possible due to urban constraints
OM Tip
Highlight tenant credit quality and contract terms. Include detailed egress/ingress studies
Lithia Springs/West I-20
5.4% - 6.0% capVacancy
2.8%
Avg Rent (1BR)
$95-115/kW/month wholesale, limited colocation
New supply coming online. Facebook's 50MW facility operational Q2 2026
OM Tip
Detail power redundancy and cooling design. Include competitive analysis vs Douglasville pricing
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What Your OM Needs to Address
Power Infrastructure Detail
Include utility letters confirming available capacity, not just allocated capacity. Detail backup generator fuel contracts and testing schedules
Data to Include
MW capacity, utility rate schedule, backup generator specifications, UPS capacity, power redundancy level (N+1, 2N)
Cooling System Performance
PUE ratings matter more than ever with rising utility costs. Include third-party energy audits if available
Data to Include
PUE by season, cooling redundancy, chiller capacity, airflow CFM, temperature/humidity ranges maintained
Fiber Connectivity Analysis
List all carriers on-net with diverse entry points. Include latency measurements to key internet exchanges
Data to Include
Carrier list, diverse fiber routes, latency to Atlanta NAP, internet exchange connectivity, dark fiber availability
Tenant Concentration Risk
Single-tenant facilities need detailed credit analysis. Multi-tenant needs lease rollover schedule and expansion options
Data to Include
Tenant credit ratings, lease terms remaining, expansion rights, cross-default provisions, parent guarantees
Operating Performance Metrics
Include SLA performance data and any outage history. Buyers want to see 99.99% uptime documentation
Data to Include
Uptime statistics, mean time to repair, preventive maintenance schedules, staff certifications, response time metrics
Expansion Capacity
Detail available land, zoning approvals, and utility capacity for future phases. Include permitting timeline
Data to Include
Developable acres, zoning approvals, utility capacity reserved, permitting status, construction timeline estimates
Investment Outlook
Short Term
Tight market through 2026. New supply limited by utility constraints. Existing facilities with available capacity will see rent growth of 8-12%. Cap rate compression likely to continue for best-in-class properties.
Medium Term
2027-2028 brings 150MW of new supply online, moderating rent growth to 5-7% annually. Edge computing demand from 5G rollout creates new opportunities in secondary submarkets. Sustainability requirements favor newer, efficient facilities.
Long Term
AI workloads drive structural demand growth. Power costs become bigger factor in tenant decisions. Facilities without expansion capability face obsolescence risk. Climate resilience and renewable power integration become differentiators.
Buyer Profile
REITs dominating acquisitions over $100M. Private equity targeting $25M-$75M deals with value-add opportunities. Hyperscale tenants buying select facilities for operational control. International capital increasing, particularly from Canada and Europe.
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