AI data center construction projects, particularly near Dallas/Fort Worth and Washington, DC, are generating new demand for warehouse space and helped send rents higher in the third quarter, real estate services company JLL said on Tuesday.
- Companies like Alphabet, Microsoft, Meta and Amazon are spending billions of dollars in a race to dominate artificial intelligence, which requires significant electricity to run servers and computer chips that must be cooled to prevent overheating.
- “Data center expansion is driving outsized industrial demand in major freight hubs such as Dallas/Fort Worth, where suppliers and infrastructure providers are clustering near hyperscale campuses,” JLL said in its industrial real estate market report for the third quarter.
- Average asking rents rose to $10.55 per square foot, up 3.2% from a year earlier, the fastest annual pace of growth since the second quarter of 2024, JLL said.
- That growth is based on so-called triple-net leases, where tenants pay property taxes, insurance and upkeep of common areas separately from base rent.
- The expansion of infrastructure-intensive industries is changing the mix of tenants and the location of demand, JLL said, noting that demand from construction, telecommunications and utilities-related tenants increased.
(Reporting by Lisa Baertlein; Editing by Sonali Paul)
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