A modulating refrigeration system includes an evaporation unit and a condensing unit. The evaporation unit generates a first output airflow comprising a lower temperature, a lower relative humidity, or both than a first supply airflow and directs the first output airflow into a building. The condensing unit generates a second output airflow at a higher temperature than a second supply airflow and discharges the second output airflow to an unconditioned space. The evaporation unit comprises a first valve operable to direct a portion of refrigerant to a secondary evaporator and primary evaporator or to direct the entire flow of refrigerant to the primary evaporator and bypassing the secondary evaporator.