Colocation Pricing Comparison 2026
What is the average colocation price in 2026?
In 2026, wholesale colocation rates average $140-$160/kW/month in Tier 1 markets (Ashburn, Silicon Valley), while Tier 2 markets (Atlanta, Phoenix) range from $115-$135/kW/month. High-density AI deployments (>50kW/rack) command a 20-30% premium due to specialized cooling requirements.
Last updated: January 2026
Wholesale Colocation Rates (1MW+)
| Market | Tier | Price Range ($/kW) | Trend |
|---|---|---|---|
| Ashburn (NoVA) | Tier 1 | $150 - $280 | ↑ Rising |
| Silicon Valley | Tier 1 | $180 - $300 | ↑ Rising |
| Dallas-Fort Worth | Tier 2 | $115 - $135 | → Stable |
| Atlanta | Tier 2 | $110 - $130 | → Stable |
| Phoenix | Tier 2 | $115 - $140 | ↓ Competitive |
What Drives Colocation Pricing?
Colocation pricing is not just about rent. It's a function of three main components:
- Base Rent ($/kW): The cost for the space and power capacity guarantee. This varies by real estate costs and market vacancy.
- Power Usage ($/kWh): The metered electricity cost. In some markets, this is a pass-through; in others, it's bundled.
- Cross Connects & Connectivity: Monthly fees for fiber connections to carriers and cloud on-ramps.
The "AI Premium"
AI workloads often require densities of 40-100kW per rack, compared to the traditional 5-10kW. Legacy datacenters cannot support this without retrofitting liquid cooling or containment. Facilities that are "AI-Ready" command a premium for this density capability.
Frequently Asked Questions
What is a typical NNN lease structure for colocation?
In a Triple Net (NNN) lease, the tenant pays base rent plus their share of property taxes, insurance, and maintenance. Most wholesale colocation deals are "modified gross" or "all-in" excluding power, rather than true NNN.
How much does 1MW of colocation cost?
For a 1MW deployment in a Tier 2 market, expect to pay ~$120,000/month in base rent plus electricity usage. In Tier 1 markets like Ashburn, this can exceed $160,000/month.
Is power included in colocation pricing?
Typically, no. Base pricing covers the capacity reservation ($/kW). Actual power consumption is metered and billed separately ($/kWh), often with a PUE (Power Usage Effectiveness) multiplier applied.
Why is Ashburn colocation so expensive?
Ashburn is the "Data Center Alley" with the world's densest fiber connectivity. Tenants pay a premium for the low-latency ecosystem and access to every major carrier and cloud provider.
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