||| FROM REAL ESTATE NEWS & TV |||
Growth in artificial intelligence is driving data center demand in Washington State, according to CBRE’s latest North American Data Center Trend Report. Tenants and owners are also attracted to the state’s tax incentives, green power and colocation capabilities.
Central Washington had the lowest vacancy of all data center markets at 0.16% in H2 2024, which is the lowest of the 18 North American markets that CBRE tracks since the report’s inception. This is down from 0.2% vacancy in H1 2024. Meanwhile, Seattle’s vacancy rate fell to 6.7%. It is noteworthy that both markets have increased in size with delivery of high-powered pre-leased product.
“Washington state’s data center tax exemptions and reliable hydropower have provided some of North America’s lowest total cost of occupancy (TOC) solutions for data center operators and users. Artificial intelligence equipment has dramatically increased the amount of power needed to cool data centers, so existing utility providers are struggling to meet the surging demand. Both operators and utilities across the state are exploring a myriad of alternate power sources to expand their offerings,” said Jane Blair, senior vice president with CBRE Data Center Solutions in Seattle.
Central Washington tripled net absorption (60 megawatts) – a measure of leasing activity – in 2024 from the year prior, which was the sixth highest among the top data center markets. In 2023, Central Washington ranked eighth in leasing activity (20.9 MW).
Seattle ranked 12th in net absorption (11.1 MW) in 2024, up from 10.6 MW of net absorption in 2023.
Seattle had 8.5 megawatts (MW) under construction in H2 2024. This is more than double the 3.5 MW under construction in H2 2023. Central Washington had 63.7 MW under construction in 2024, 56% of which was pre-leased. While this is down from 99.7 MW under construction in H2 2023, over 100 MW of new construction is planned.
In late H2 2024, CyrusOne completed its Quincy development in Central Washington. In Seattle, Sabey announced plans to expand its SDC Building 4 as well as developing plans to add a new data center building to its campus.
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We need to remove the tax exemptions for data centers. Data centers need to pay their way, with the states deficit looming large and the energy to power them is becoming scarce.
The A.I. driven expansion of energy and water hog data centers is not quite as insane as bitcoin mining, but it’s close!
Thanks for spotting this, Lin, and publishing an excerpt relevant to WA state.
In the full article, it says that the growth in national data-center construction increased TWELVE-FOLD to 6350 megawatts of power consumption last year. That’s about the peak output of six nuclear power plants, or ten times their average power output. In researching my October 2024 Seattle Times essay, “ The AI Power Struggle, I found a comment by none other than Bill Gates saying that the power demands of AI data centers was “staggering.”
Staggering indeed.
And this article seems to suggest that BPA hydropower for these centers is cheap and available. NOPE! It’s already tapped out and we ordinary users are facing big rate increases when the OPALCO contract with BPA is renegotiated in 2028.
I agree with John Fleischer that the data center tax break needs to go. Are you listening, Alex, Debra and Liz?
Data centers don’t just have a huge energy cost, they also have a huge material footprint. A recent analysis found that “about 965 thousand metric tons of mining rock waste just for the GPUs in OpenAI’s” data servers. To take just two examples of companies here in the PNW–Microsoft and Amazon–their data centers are far far bigger than Open AI’s. The total rock being displaced for the materials to build the computers in data centers around the world and here in the PNW is truly staggering, to reuse that word. Of course, most of that extraction happens far away and affects mostly poor people and ecosystems so (for now) we can close our eyes and pretend it isn’t happening.
And what are some of the primary uses of data centers beyond our nightly Netflix addictions, deep fakes, and cat videos? And AI in particular?
Fighting wars, extracting more materials (oil, gas, metals, minerals), and even making industrial fishing more efficient (read: more effective and destructive).
The tax breaks WA hands out to data centers make every WA resident complicit in these activities.
No need to worry about power for data centers, or for SJC for that matter. Trump is “Reinvigorating America’s Beautiful Clean Coal Industry”:
https://www.whitehouse.gov/presidential-actions/2025/04/reinvigorating-americas-beautiful-clean-coal-industry-and-amending-executive-order-14241/
“Our Nation’s beautiful clean coal resources will be critical to meeting the rise in electricity demand due to the resurgence of domestic manufacturing and the construction of artificial intelligence data processing centers.”
(Never mind that “clean coal” is an oxymoron and a myth.)
Instead of getting a multi-million $ grant to buy an experimental machine that will power only 400 homes, perhaps we should apply for a grant to build our very own CLEAN coal fired power plant right here in SJC that would power EVERYONE’s homes, with energy to spare! No more energy woes! “America’s coal resources are vast, with a current estimated value in the trillions of dollars, and are more than capable of substantially contributing to American energy independence…”. Then we could built out to … what was it? 120,000 people in SJC?? No problem at all. We can be the “Seattle in the middle of the Salish Sea”. We could build bridges to the mainland and even build a highway to link all the islands together. And of course use AI to help plan it all. Heck we could even host our own coal-fired data center right here on the National Monument. It’ll be fabulous!
It will all be fine! +3C here we come! Woo Hoo!
(I’m kidding!!!)