Hyperscalers, cloud providers and enterprise users are becoming more precise in how they evaluate data center opportunities. In a session at NAIOP’s inaugural I.CON Data Centers conference this week in Jersey City, New Jersey, panelists shared what differentiates successful projects and how developers can align strategy with evolving user expectations.
The session was moderated by Randy Borron, SIOR, vice chairman, Cushman & Wakefield; panelists included Todd Johnson, director of development, mission critical, Ryan Companies US, Inc.; Ryan McGrath, Northeast critical facility practice area leader, Gensler; and Marie Purkert, national client leadership team, Kimley-Horn.
The Explosive Growth of Data Center Development
“I think we can refer to this as a once-in-a-generation infrastructure expansion,” said Borron. “Globally, the [data center] market now exceeds $340 billion and is growing at double-digit numbers – don’t write that down because it’s going to change tomorrow.”
Data center growth is being driven by AI workloads that are fundamentally changing how data centers are sized, located, powered and designed, Borron added. The U.S. accounts for more than half the global hyperscale capacity and demand continues to outpace supply; in 2025 alone, the U.S. market absorbed 2.5 GW of capacity.
“The evolution of data center development is just a hockey stick [indicating a long period of slow growth followed by a sudden, dramatic spike] in the last three, possibly four, years since ChatGPT [emerged],” said Johnson.
“In terms of the [data center] developer, they need to be in a position to have a bare minimum of due diligence done on a site in order to attract users,” he said. “We call it ‘stories’ because it really is just what you can gather on the surface about what the potential is on site from a power perspective or an entitlements perspective.”
While the Big 5 hyperscalers [which typically include Amazon, Microsoft, Google (Alphabet), Meta and Oracle] all have submission portals, don’t stop there if you’re trying to get them to look at your site, said Johnson. Getting in front of the transaction manager themselves is key.
“If you want to get into the Big 5, find out who the person is in your area by networking, and/or partnering with someone who has those relationships,” Johnson said. “But be careful because someone might say they have those relationships and they don’t have them.”
“As a developer, you may have experience in developing properties, but [users] want to see that you have expertise in [the data center] space, so partnering with people who have done it before is really how you instill confidence in potential users,” McGrath said. “They’re not looking to trust Joe Developer to build them a $1 billion site.”
“I do think finding those key partners early is very important to getting credibility … once you do a few, maybe that lets you spin off by yourself,” McGrath said. It also builds credibility when you can say that not only do you have a site and think you can get 100 MW on it, but that you have a site and already have 100 MW on it and a signed agreement with a power authority.
Power, Flexibility and Scalability
Next, Borron turned to that critical component of power availability, asking the panel, “How are users evaluating power risk today, and how is that reshaping the site selection and entitlement strategy?”
“Power has been something that we have had at the forefront of this discussion now for the last couple of years,” Purkert said. Key questions to consider include: What conversations have you had already with the utilities that are serving that piece of property? Where is that transmission line coming in? What is the time frame to get those that connectivity to your site?
“And in addition, what flexibility do you have on your site right now when it comes to power? Do you have that natural gas line? What is your risk aversion to things like hydrogen fuel cells? Are you willing to look at microgrid and on-site [power] generation?”
“You have to come to the table willing to talk about different solutions, whether you’re the design partner and/or the developer in that space,” Purkert said. “You really need to look at everything in order to figure out what’s going to work for your schedule, and also what’s going to work for the end product.”
When it comes to power, the idea that tier-one markets still reign supreme is inaccurate, Purkert said. “Any market now where you’re able to advance and get that signature early or that commitment right away [for power from the utility company] is now becoming a new tier-one market.”
Incorporating Flexibility in Design
“The expectations around density, scalability, AI workloads, and the cooling technology that goes along with that are reshaping design in a big way,” Borron noted. “What are the hardest aspects? What are the trade-offs that you go through there?”
Chip technology is changing rapidly, sometimes every two or three years, McGrath said, which changes the required density for the data centers.
“With all the changing technology, the ask that we’re getting is, ‘How can you be flexible and how can we offer late-binding decision-making,” he said.
Designers might decide to overbuild a little on the building shell, or provide more open space in the halls, or incorporate the ability to have multiple rack positionings. “Things like that that allow for us to accommodate whatever the chip technology is.” Data center design needs to incorporate flexibility and anticipate technological change before it even happens.
Balancing Speed to Market with Community Integration
“The reality is that now we are operating in an industry that has shielded itself a little bit from communities in the past,” Purkert said. “And now we’re entering an age where transparency is key to getting those permits, that community buy-in and ultimately have a successful project.”
“It’s also important to be good stewards of the communities in which we’re operating; many of us are also living in those communities, and we want to see them continue to prosper,” she said.
