Report: Data Center Boom Fueling Increase in
Industrial Real Estate Demand
ARLINGTON, VA—While New York State and most recently the Town of Orangetown in Rockland County passed moratoriums on data center projects, a recently released report shows that data center development is fueling an increased share of industrial real estate demand nationwide.
CoStar reported that data center inventory has reached roughly 69 gigawatts of existing capacity, while another 43 gigawatts are currently under construction across the United States. The increase in development activity has impacted industrial demand, with data center-adjacent occupiers accounting for more than 6% of leasing activity across logistics properties within five miles of data center facilities in 2026, up from less than 3% in 2020. Growth has been broad-based across several categories, including construction firms, power and cooling equipment suppliers, operators and IT infrastructure providers.
“The data center industry remains one of the fastest-growing segments of commercial real estate,” said Juan Arias, national director of industrial analytics at CoStar Group. “Vacancy remains near historic lows as demand from hyperscale cloud providers and AI-related users continues to outpace new supply. Hyperscale facilities now account for 64% of existing capacity, underscoring the scale at which major technology companies are expanding their infrastructure footprints.”
Among major markets, Dallas-Fort Worth leads the nation with approximately 10 million square feet of occupied logistics space leased by data center-adjacent industries since 2025. Houston, Atlanta and Phoenix rank behind Dallas, respectively.
“Many of these markets coincide with established or emerging data center hubs where abundant land, infrastructure investments, and relatively favorable power economics have attracted large-scale development,” said Mr. Arias. “Operators are increasingly prioritizing locations with access to new electrical generation, substations, and transmission infrastructure as they seek to bring capacity online. As a result, demand is extending beyond data center buildings themselves and into the broader supply chain required to construct and operate them.”
New York State has imposed a one-year moratorium on new data center projects of 50 megawatts or more, while on Aug. 25, the Town of Orangetown approved six-month moratorium on new data center and battery storage project applications. A proposed DataBank expansion proposal in Orangetown, which is in the approval process, is not impacted by the moratorium
Published: September 2, 2026.