Key facts
- AI data center expansion is driving industrial demand in major freight hubs.
- Suppliers and infrastructure providers are clustering near hyperscale campuses.
AI data center construction projects are driving new demand for warehouse space and increasing rents in major US freight hubs, according to real estate firm JLL. Average asking rents rose 3.2% year-on-year in the third quarter, the fastest annual growth since Q2 2024.
The expansion of AI data centers is creating new demand for industrial real estate, impacting warehouse rents and the types of tenants occupying these spaces in key US logistics hubs.
AI data center construction projects are generating new demand for warehouse space and contributing to higher rents in major US freight hubs like Dallas/Fort Worth and Washington, DC, according to a report by real estate services firm JLL. Companies such as Alphabet, Microsoft, Meta, and Amazon are investing heavily in artificial intelligence, which requires substantial electricity for servers and computer chips that need cooling. JLL noted that data center expansion is driving significant industrial demand, leading suppliers and infrastructure providers to cluster near hyperscale campuses. The report also indicated an increase in demand from construction, telecommunications, and utilities-related tenants, reflecting a shift in the tenant mix and demand locations. Average asking rents for industrial space rose to $10.55 per square foot in the third quarter, marking a 3.2% increase from the previous year, the fastest annual growth rate since the second quarter of 2024. This growth is based on triple-net leases, where tenants cover property taxes, insurance, and maintenance.
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