Data Center Investment in Raleigh-Durham
Raleigh-Durham's data center market is picking up serious steam. The Research Triangle's tech boom, universities, and business-friendly environment are drawing hyperscale operators and colocation providers. Duke Energy's got capacity, fiber's abundant, and you're not competing with Manhattan prices. But power costs are creeping up and the best sites are getting scarce. Here's what you need to know about moving data center deals in the Triangle.
Market Context
Cap Rate Range
5.0% to 7.5% depending on tenant quality and power capacity
Current Vacancy
8-12% available capacity across existing facilities
Rent Trend
Power costs up 15% since 2024, colocation rates following at $180-220/kW monthly
Absorption
Strong demand from AI/ML workloads and enterprise edge deployments
Price Per Unit Trend
$2.8M to $4.2M per MW for stabilized facilities
Transaction Volume
$850M in sales over past 18 months, dominated by build-to-suit deals
Submarket Analysis
Research Triangle Park
5.2-6.8% capVacancy
6-9%
Avg Rent (1BR)
$195/kW monthly
Prime location with fiber density and corporate tenants
OM Tip
Highlight proximity to major tech campuses and redundant fiber paths
East Raleigh/Knightdale
6.0-7.5% capVacancy
12-15%
Avg Rent (1BR)
$165/kW monthly
Emerging hyperscale corridor with available land
OM Tip
Show Duke Energy substation capacity and expansion rights
Durham Bulls Area
5.8-7.0% capVacancy
8-11%
Avg Rent (1BR)
$175/kW monthly
Mixed enterprise and colocation demand
OM Tip
Detail fiber carrier relationships and uptime history
Cary Technology Corridor
5.0-6.5% capVacancy
5-8%
Avg Rent (1BR)
$210/kW monthly
Premium enterprise market with limited supply
OM Tip
Document enterprise tenant roster and renewal probabilities
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What Your OM Needs to Address
Power Infrastructure Detail
Duke Energy rate schedules and demand charges are climbing
Data to Include
Current utility rates, substation capacity, backup generator specs, UPS configuration, and any demand response contracts
Cooling System Analysis
Triangle summers are brutal and cooling efficiency drives NOI
Data to Include
PUE by season, cooling redundancy level (N+1, 2N), chiller plant capacity, and recent efficiency upgrades
Fiber Connectivity Map
Carriers are picky about routes and Triangle has good diversity
Data to Include
On-net carrier list, fiber entrance points, cross-connect revenue, and any dark fiber rights
Tenant Concentration Risk
Single hyperscale tenant can be 70%+ of revenue
Data to Include
Lease terms by tenant, expansion options, renewal probability, and credit ratings
Expansion Capacity
Land for growth is getting tight in prime areas
Data to Include
Available land, utility capacity for expansion, zoning rights, and development timeline estimates
Operating Cost Breakdown
Power is 60-70% of operating costs and rising
Data to Include
Three years of utility bills, maintenance contracts, property tax assessments, and staffing costs
Investment Outlook
Short Term
Strong buyer demand through 2027. AI workloads and edge computing are driving absorption. Cap rate compression likely as institutional money finds the market. Power availability becoming the main constraint.
Medium Term
2027-2030 should see continued growth as more hyperscale operators build in secondary markets. Duke Energy's expansion plans will determine how much new supply comes online. Watch for utility rate increases.
Long Term
Triangle's positioning as a tech hub makes this a 10+ year growth story. Climate risk is manageable compared to coastal markets. Main worry is whether power infrastructure keeps pace with demand.
Buyer Profile
REITs and institutional funds for stabilized assets over $50M. Private equity for value-add plays. Some family offices buying smaller colocation facilities. Hyperscale operators still prefer build-to-suit but will acquire for speed.
Marketing a data center property in Raleigh-Durham?
DealDraft generates professional offering memorandums with market-specific data and property-type expertise built in.
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