Sep 10, 2025
10-15 mins
Top 10 U.S. Data Center Colocation Markets in 2025 (Featuring Growth Stats & Providers)
The top U.S. colocation markets in 2025 are defined by absorption, interconnection density, and expansion capacity. Northern Virginia continues to dominate with nearly half of national absorption, while Chicago, Phoenix, Dallas–Fort Worth, and Atlanta are establishing themselves as Tier I hubs. Emerging markets like Austin–San Antonio and Denver are on the rise, and Miami is one to watch as a LATAM gateway. These metros represent the most strategic nodes for hyperscalers, enterprises, and AI workloads.
This list covers the 10 most strategic U.S. colocation hubs in 2025, backed by the latest insights from JLL (2024 Data Center Outlook) and other industry leaders. Whether you’re looking for interconnection density, expansion capacity, or strategic proximity to end users, these markets represent the most critical nodes in America’s data center ecosystem.
What Factors Define a Top 10 U.S. Colocation Market?
A top U.S. colocation market blends interconnection density, land and power availability, and resilience against natural disasters, making it ideal for AI, edge, and enterprise workloads. Rich ecosystems of carriers and cloud on-ramps reduce latency and improve routing, while geographic advantages and permitting speed determine how fast operators can expand.
Growth capacity: Power availability is now the deciding factor for expansion.
Growth capacity depends on utility infrastructure, available land, and predictable permitting. Available power, not space, is increasingly the deciding factor for market expansion (JLL).
Reliability: Low disaster risk keeps uptime high and costs down.
Low risk from natural disasters supports uptime and reduces hardening costs, making some markets more attractive for both primary and disaster recovery deployments.
Demand mix: Balanced enterprise + hyperscale demand strengthens markets.
A healthy market also offers a balanced demand mix, serving both enterprise and hyperscale customers while supporting adjacent ecosystems like CDN nodes, fintech exchanges, and AI labs.
Economics: Tax incentives, competitive energy pricing, and real estate advantages improve TCO.
Competitive energy pricing, reasonable real estate costs, and favorable tax and regulatory climates are also attractive features for operators that improve the total cost of ownership.
Carrier-neutral facilities with rich interconnection options reduce latency and expand routing diversity, especially when located near major internet exchanges, long-haul fiber routes, and subsea cable access points. Geographic advantages also matter, as proximity to other major metros and a major airport shortens deployment timelines and eases ongoing maintenance by ensuring faster equipment delivery and engineer access. Finally, access to an educated workforce and deep vendor ecosystem, from electricians and network engineers to OEM support, ensures facilities can be built, staffed, and maintained efficiently.Carrier-neutral facilities with rich interconnection options reduce latency and expand routing diversity, especially when located near major internet exchanges, long-haul fiber routes, and subsea cable access points. Geographic advantages also matter, as proximity to other major metros and a major airport shortens deployment timelines and eases ongoing maintenance by ensuring faster equipment delivery and engineer access. Finally, access to an educated workforce and deep vendor ecosystem, from electricians and network engineers to OEM support, ensures facilities can be built, staffed, and maintained efficiently.
Quick Start Guide: Top U.S. Colocation Markets by Use Case
Want to quickly find the right market for your specific needs? Follow this helpful quick start guide to learn browse top markets by colocation use case:
Which markets are best for AI training workloads?
Northern Virginia
Phoenix
Pacific Northwest
Which are strongest for edge deployments?
Miami
Denver
Dallas-Forth Worth
Which cater to finance/compliance-heavy sectors?
New York
New Jersey
Chicago
Which are sustainability leaders?
Pacific Northwest (hydropower)
Phoenix (water-free cooling)
For more detailed benchmarks on cost, absorption, and vacancy, see current metro-level reports from JLL, CBRE, and Cushman & Wakefield.
Top U.S. Data Center Colocation Markets
1: Northern Virginia (Ashburn)
Northern Virginia remains the #1 U.S. colocation market in 2025 because of unmatched interconnection density and global subsea connectivity, with ~847 MW absorption in H2 2024, nearly half of the national total. Northern Virginia is the undisputed king of colocation, collectively and colloquially known as "Data Center Alley." This region hosts the densest concentration of fiber routes and connected data centers in the world. It is the go-to destination for hyperscalers, global network operators, and enterprises that require low-latency access to the East Coast and beyond.
Northern Virginia’s growth is fueled by a dense interconnection ecosystem, competitive power rates, land availability in submarkets like Loudoun County, and favorable tax incentives. Despite increasing power constraints, demand remains unshaken, with major expansions underway.
Key Advantage: Rich interconnection density and subsea cable proximity
Notable Providers: Equinix, Digital Realty, NTT, AWS, Microsoft, Google
Compare colocation pricing in Northern Virginia now.
2: Chicago
Chicago ranks as the Midwest’s leading colocation hub thanks to its central U.S. location, low disaster risk, and ~308 MW absorbed in 2024, making it ideal for enterprises seeking disaster recovery and financial services connectivity.
Its long-haul fiber, diverse carriers, and suburban growth in Elk Grove Village make it a key interconnection hub between coasts. The city’s robust long-haul fiber infrastructure, diverse carrier ecosystem, and proximity to major cloud on-ramps make it a top choice for enterprises and hyperscalers seeking low-latency reach across the continent.
Chicago’s role as a disaster recovery site and key content distribution hub is strengthened by its low natural disaster risk and extensive transportation network, including O’Hare International Airport for rapid deployment of equipment and maintenance teams.
Key Advantage: Central location and disaster recovery hub
Notable Providers: Equinix, CyrusOne, CoreSite, Digital Realty
Explore data center availability in Chicago.
#3: Phoenix
Phoenix is one of the fastest-growing U.S. colocation markets in 2025, chosen for its low natural disaster risk, competitive power costs, and hyperscale-ready capacity. In 2024, it absorbed ~166 MW, making it a preferred site for AI-ready deployments, hypercsale campuses and semiconductor-related deployments.
Its desert climate supports energy-efficient cooling for much of the year, and new builds are increasingly adopting water-conserving technologies to address sustainability concerns.
Strategically located for connectivity to West Coast markets without the congestion and costs of California, Phoenix is also becoming a preferred location for AI workloads and semiconductor manufacturing-related infrastructure.
Key Advantage: Resiliency + cost-efficient growth
Notable Providers: Aligned, Iron Mountain, EdgeCore, CyrusOne
Explore the best colocation providers in Phoenix.
#4: Dallas–Fort Worth
The Dallas–Fort Worth metroplex remains one of the most diversified and resilient data center markets in the nation because of its balanced ecosystem, 123 MW absorption in 2024, and low disaster risk for serving hyperscale, enterprise, and cloud on-ramps across multiple industries.
DFW benefits from a central U.S. location, extensive fiber connectivity, and a pro-business regulatory climate that attracts both hyperscale and enterprise deployments. The market supports a mix of retail colocation, wholesale, and cloud on-ramp facilities, serving industries from finance and healthcare to energy and telecommunications.
Submarkets such as Plano, Richardson, and Garland are seeing significant new development as core sites become more constrained. The region’s relatively low exposure to natural disasters, coupled with competitive energy pricing, keeps it high on the list for disaster recovery and primary production sites alike.
Key Advantage: Balanced ecosystem + low disaster risk
Notable Providers: QTS, Digital Realty, Equinix, CyrusOne
AI-ready colocation facilities in Dallas-Fort Worth.
#5: Atlanta
Atlanta has rapidly emerged as one of the nation’s most dynamic colocation markets, recording an impressive 815 MW of absorption in the first half of 2024 alone. Long regarded as the connectivity hub of the Southeast, Atlanta benefits from a strategic position at the intersection of major fiber routes, robust carrier density, and strong regional demand from cloud, enterprise, and content providers.
State and local tax incentives, combined with Georgia’s competitive energy pricing, have fueled the construction of new hyperscale campuses and multi-tenant facilities. Submarkets such as Lithia Springs and Douglas County are seeing large-scale developments from operators including QTS Data Centers, Flexential, and CyrusOne. With a growing tech workforce, increasing edge deployments, and strong regional economic growth, Atlanta is cementing its position as a Tier I market.
Find the best Atlanta colocation partners now.
6: Austin–San Antonio Corridor
The Austin–San Antonio corridor is a major growth market with 646 MW live and 1.2 GW planned capacity, driven by semiconductor expansion and tech growth, making it a strategic location for colocation providers targeting AI and edge deployments.
The region’s growth is fueled by an influx of tech companies, semiconductor manufacturing expansion, and favorable real estate conditions.
Submarkets between Austin and San Antonio offer proximity to major metropolitan areas while retaining lower costs and easier permitting. While utility infrastructure is under pressure, ongoing grid investments aim to support the rapid pace of development.
Capacity (2024): 646 MW live, 664 MW under construction, 1.2 GW planned
Key Advantage: Rapid growth corridor fueled by tech + semiconductors
Notable Providers: Meta, Microsoft, Digital Realty
Compare colocation pricing in Austin and San Antonio.
#7: New York–New Jersey
A long-standing cornerstone of U.S. data center infrastructure, the New York/New Jersey market serves as a critical hub for industries requiring low-latency connectivity to Manhattan’s financial district, major media companies, and global internet exchanges. With deep subsea cable connectivity to Europe and beyond, it remains essential for financial trading, media streaming, and enterprise operations.
While growth is slower compared to Sunbelt markets, steady demand from regulated sectors, combined with a concentration of carrier hotels and peering points, keeps the market resilient.
Key Advantage: Subsea connectivity + financial trading hub
Notable Providers: Equinix, Digital Realty, CoreSite
Data center availability in New York and New Jersey.
8: Los Angeles
The West Coast’s gateway to Asia-Pacific markets, Los Angeles hosts multiple subsea cable landing points and a dense peering ecosystem. Its stronghold in the entertainment, gaming, and content delivery industries makes it indispensable for latency-sensitive workloads. Despite challenges with high real estate costs and complex zoning regulations, the market’s role in global content distribution remains unmatched.
Key Advantage: Global content distribution hub
Notable Providers: Equinix, CoreSite, Vantage
Explore data center availability in Los Angeles.
9: Pacific Northwest (Portland–Seattle)
The Pacific Northwest offers over 2 GW of sustainable colocation capacity, powered by hydropower and proximity to major cloud providers, making it a leading hub for hyperscale, HPC, and AI deployments.
Seattle remains a dense urban market, while Portland’s lower costs and development-friendly policies are attracting large-scale new builds. The region is particularly attractive for AI and HPC workloads seeking sustainable power and low PUEs.
Key Advantage: Sustainable power + hyperscale cloud base
Notable Providers: Flexential, Stack, T5
Explore hyperscale-ready colocation markets: Portland and Seattle.
10: Denver
Denver is an emerging U.S. colocation hub because of its central geography, low natural disaster risk, and expanding fiber routes, serving as both a primary deployment market for enterprises and a disaster recovery site for coastal workloads.
Denver’s appeal is rising among cloud, government, and telecom customers. With available land, relatively low power costs, and growing fiber routes, the market is seeing increased activity.
Key Advantage: Central location + low natural disaster risk
Notable Providers: Flexential, CoreSite, H5
Bonus Market to Watch: Miami
Miami is a rising colocation market to watch in 2025, acting as the primary U.S. gateway to LATAM with new subsea cables and fintech demand, though limited land and power constrain hyperscale growth.
It’s attracting fintech and content providers, though power and land constraints limit mega-campus growth.
Key Advantage: LATAM subsea connectivity
Notable Providers: Equinix, Cyxtera, Digital Realty
Find the best colocation providers in Miami.
How to Compare Colocation Availability Across U.S. Markets
Want to compare these U.S. colocation markets in real time? Inflect helps you explore availability, assess providers, and quote instantly across all major U.S. metros. Whether expanding in a Tier I hub or entering an emerging region, Inflect makes it seamless.
About the Author
Trevor Hopkins
Account Manager at Inflect
Trevor is an expert in the digital infrastructure industry with a proven track record of helping buyers navigate complex markets—whether building next-gen data centers, expanding global networks, or evaluating compliance-heavy workloads like blockchain. He shares insights and observations drawn from practical experience and real cases, writing at the intersection of technology, regulation, and the systems that keep the internet running.
Contact:
Email:
trevor.hopkins@inflect.com
https://www.linkedin.com/in/trevor-hopkins-2ab3ba201/