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 per cent 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.
