Data Center Development Fuels Increasing Share of Industrial Demand

Growth in data center development is fueling an increasing share of U.S. industrial demand, CoStar Group reported. Data center-adjacent occupiers now account for more than 6% of leasing activity across logistics properties within five miles of data center facilities, up from less than 3% in 2020.

Nationally, data center inventory has reached roughly 69 gigawatts of existing capacity, with another 43 GW under construction. This has led to broad-based growth across several categories related to development and operation of the centers, including construction firms, power and cooling equipment suppliers, operators and IT infrastructure providers.

“Operators are increasingly prioritizing locations with access to new electrical generation, substations and transmission infrastructure as they seek to bring capacity online,” said Juan Arias, national director of industrial analytics at CoStar. “As a result, demand is extending beyond data center buildings themselves and into the broader supply chain required to construct and operate them.”

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 16-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 7-10 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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