The data center development landscape is evolving at extraordinary speed, panelists agreed during a session at NAIOP’s I.CON Data Centers this week in New Jersey. But as demand accelerates, so do the challenges. Developers today are navigating a far more complicated environment than even two years ago – one shaped by power constraints, growing community scrutiny and shifting utility requirements.
Moderated by Henry Fox, managing director at Newmark, the panel featured Sam Stockdale, managing director of power and infrastructure at Link Logistics; Douglas Swain, president of Logistix Property Group; and Jeff Zygler, founder and chief executive officer of Active Infrastructure.
As the group explored what it now takes to deliver large-scale data center projects across both established and emerging markets, several themes consistently emerged.
Certainty Has Become More Valuable Than Scale
Not long ago, the industry’s primary focus was securing large land positions with access to significant power capacity. Today, the conversation has shifted toward certainty for entitlements and power delivery.
A site’s viability can no longer be judged solely by headline megawatt availability. Developers are taking a much closer look at whether power commitments are truly secured, what level of collateral utilities are required, and whether projects have a realistic path to delivery.
At the same time, entitlement risk has become a defining factor in site selection as data center projects face greater public scrutiny in many markets. Unlike power challenges, which can often be addressed with enough time and capital, entitlement issues are far less predictable.
As a result, investment committees are becoming more cautious. In some cases, unresolved entitlement questions are creating more concern than difficult infrastructure challenges.
Community Engagement is Now a Core Development Strategy
The importance of community relations and public perception continues to grow as organized opposition to data center projects becomes more common, particularly in fast-growing markets. Concerns around water usage, power consumption, noise and land use are increasingly surfacing during entitlement processes.
Panelists acknowledged that some of those concerns stem from misunderstandings about how modern facilities operate, particularly around cooling systems and infrastructure impacts on the residential consumer. At the same time, they stressed that dismissing community concerns is not a viable strategy.
Instead, developers are approaching municipalities and local stakeholders as long-term partners and considering that political dynamics are also becoming part of project underwriting, with election cycles, leadership changes and shifting public sentiment all capable of affecting project timelines and approvals – especially in jurisdictions where zoning codes do not clearly address data center uses.
Power Strategy is Becoming More Sophisticated
While access to power remains foundational, the industry’s approach to power strategy is evolving quickly.
Rather than relying exclusively on utility-delivered grid power, developers are evaluating broader infrastructure solutions that include natural gas access and alternative energy strategies designed to accelerate delivery timelines.
The industry is also adapting to increasingly stringent utility requirements that require, in many markets, larger deposits, stronger financial guarantees, and a more rigorous application process before reserving capacity.
Utility coordination has become far more collaborative, with developers participating directly in procurement efforts for long-lead electrical equipment and, in some cases, contributing to infrastructure development to compress timelines.
Select Emerging Markets Are Gaining Momentum
Geographic preferences are also shifting as traditional data center markets become increasingly constrained.
While established hubs such as Northern Virginia, Dallas, Chicago and Atlanta remain highly active, developers are expanding into emerging regions where power availability and development flexibility may offer advantages – including markets across the Midwest, Pennsylvania and parts of the South.
Still, panelists stressed that market selection is no longer simply about finding inexpensive land or secondary locations. Developers are evaluating regions through a broader lens that includes entitlement certainty, infrastructure readiness, political climate and long-term scalability.
Projects capable of delivering meaningful power capacity before 2030 are attracting significant interest regardless of geography. In many cases, speed to power has become more important than whether a market is traditionally viewed as “tier one” or “tier two.”
Supply Chain Control is Becoming a Competitive Advantage
Beyond land and power, developers increasingly view equipment procurement and supply chain management as critical differentiators.
Long-lead electrical infrastructure – including transformers and switchgear – continues to create significant schedule risk. In response, some firms are taking a more proactive approach by locking in equipment earlier and securing manufacturing capacity well ahead of project delivery.
Panelists suggested that in the years ahead, managing supply chain timing may become just as important as controlling land positions.
A More Disciplined Phase of Growth
Despite the challenges, panelists remained optimistic about the sector’s long-term outlook, acknowledging that the industry is entering a more disciplined phase – one where successful execution depends less on speculative land aggregation and more on infrastructure expertise, stakeholder alignment and development certainty.
