The data center industry across the Americas is growing fast in 2025, driven by steady demand for operational space.
North America now has 25.6 gigawatts (GW) online, with a record 12.1 GW under construction—with approximately 88.5% already pre-committed. Key spots like Northern Virginia, with 6.2 GW operational and 2.6 GW under construction, as well as Portland, Oregon now topping 2 GW capacity, are pulling in the big players.
But power shortages and long grid waits are pushing development to emerging areas like Pennsylvania, North Carolina, and Iowa. Solutions like on-site power and nuclear deals, such as those with Constellation Energy, are helping, while grid upgrades like Nevada’s Greenlink project aim to ease the pressure.
Toronto stands out as Canada’s tech hub, holding firm in the first half of 2025. Its operational capacity reached 312 megawatts (MW), vacancy dropped to 7.6 percent, and the construction pipeline grew to 236 MW. Supported by a two-billion Canadian dollar push for sovereign artificial intelligence computing, the Greater Toronto Area is set to meet rising needs with a focus on clean energy.
That’s why, for this week’s issue, we’ll dive into the data center phenomenon; driven largely by AI and Big Data, and how various markets are trying to meet an insatiable demand.
Microsoft’s Markham Megaproject Fuels 236 MW Construction Surge in Greater Toronto Area
Toronto’s data center market finished the first half of 2025 on a strong note. Operational capacity hit 312 MW, with 20 MW absorbed during the period.
Forty-three operators, ranging from shared colocation setups to large self-builds, keep the market active. Vacancy tightened to 7.6 percent, down half a point from late 2024, showing demand is outpacing available space, especially with artificial intelligence workloads growing.
The construction pipeline nearly doubled to 236 MW, boosted by a 112-megawatt project on Langstaff Road in Markham. With 360 MW planned, the area is set for long-term growth. Development spreads to suburbs like Markham, Etobicoke, Mississauga, and Cambridge, offering space for larger sites, better power access, and lower costs while staying close to Toronto’s skilled workers.
Artificial intelligence fuels much of this demand. Canada’s $2-billion strategy supports homegrown computing power, and Toronto, home to major tech firms, is a prime beneficiary. Ontario aims to phase out natural gas by 2035, with plans for solar, wind, batteries, and heat reuse from centers. New builds must meet these green standards, which could slow some projects but ensure sustainability.
The market’s progress shows in the numbers. Information technology load grew from 33 MW under construction in 2021 to 120 MW in 2024. In the first half of 2025, that figure jumped to 236 MW under construction – 223 MW of which was pre-committed – as well as another 360 MW planned.
Most new space targets big artificial intelligence and cloud users, leaving little room for others right away. North America’s vacancy sits at 4.2 percent; at just 3.5 percent in the United States, and with only 16 spots of five MW or more open across the nation.
Toronto offers on-site power options and clean energy ties, similar to trends south of the border. For users, the mix of colocation—holding steady—and hyperscale builds offers choices, though 76 percent of growth leans toward large artificial intelligence setups, pushing smaller players to wait on planned projects. The major bottleneck for the Greater Toronto Area, however, are the deal economics.
Significant land and construction costs, coupled with limited scale in existing, well-located land parcels, mean a balance of proximity to labour along with realistic pricing and access to power allocations are necessary to make a blockbuster project feasible.
Drawing parallels to many other aspects of business and life, if enough scale cannot be secured, major players are often looking south of the border where the economics are simply easier and rules more lax.
Conclusion:
Overall, Toronto ended the first half of 2025 with 312 MW online and 596 MW in the pipeline, a solid base for the year ahead. The artificial intelligence focus and clean energy push, backed by national funding, help it compete with the larger, established U.S. markets. Lessons from nuclear deals elsewhere could speed things up here, though planning remains critical.
The Greater Toronto Area certainly has the demand and is bringing in supply… but can it keep up? Or will the eventual power strain and deal economics make it unfeasible to grow once the largest infill land sites are no longer available?
For a confidential consultation or a complimentary opinion of value of your property please give us a call.
Until next week…
Goran Brelih and his team have been servicing Investors and Occupiers of Industrial properties in Toronto Central and Toronto North markets for the past 30 years.
Goran Brelih is an Executive Vice President for Cushman & Wakefield ULC in the Greater Toronto Area.
Over the past 30 years, he has been involved in the lease or sale of approximately 25.7 million square feet of industrial space, valued in excess of $1.6 billion dollars while averaging between 40 and 50 transactions per year and achieving the highest level of sales, from the President’s Round Table to Top Ten in GTA and the National Top Ten.
Specialties:
Industrial Real Estate Sales and Leasing, Investment Sales, Design-Build and Land Development
About Cushman & Wakefield ULC.
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries.
In 2020, the firm had revenue of $7.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com.
For more information on GTA Industrial Real Estate Market or to discuss how they can assist you with your real estate needs please contact Goran at 416-756-5456, email at goran.brelih@cushwake.com, or visit www.goranbrelih.com.
Connect with Me Here! – Goran Brelih’s Linkedin Profile: https://ca.linkedin.com/in/goranbrelih
Goran Brelih, SIOR
Executive Vice President, Broker
Cushman & Wakefield ULC, Brokerage.
www.cushmanwakefield.com
Office: 416-756-5456
Mobile: 416-458-4264
Mail: goran.brelih@cushwake.com
Website: www.goranbrelih.com
