Power Access Overtakes Land and Labor in US Site Selection

Electricity has become the make-or-break factor deciding where America's biggest projects get built.

Nina Dale
October 15, 2026

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Power Access Overtakes Land and Labor in US Site Selection

Good morning. Power, not land or labor, now decides where America's biggest projects land. Site selectors rank it their top factor as data centers push electricity demand toward a doubling by 2027.

CRE Trivia 🧠

Which Houston twin-tower office complex by Philip Johnson was dubbed the "building of the decade"?

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Market Snapshot

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Grid Economy

Electricity Now Decides Where Big Projects Land

Electricity has overtaken land, labor and incentives as the single biggest factor deciding where America's most capital-intensive projects get built, from data centers to advanced manufacturing, according to a new site-selectors survey.

By the numbers: Among the 72 members of the 2026 Site Selectors Guild, 79% ranked power access a top influence this year, Bisnow reported, with labor and geopolitics each at 50%. More than half said inadequate supply alone is now enough to strike a location off the list.

A fast reversal: The shift has been abrupt. Tariff policy topped the guild's 2025 list at 87% and utility capacity drew 66%, while workforce availability ranked first as recently as 2024 at 76%, showing how quickly the grid jumped the queue.

Demand outruns supply: Goldman Sachs Research projects US electricity demand for these projects climbing from 31 GW in 2025 to 66 GW by 2027, a jump of more than 100% led by data centers. Utilities cannot keep pace, and equipment lead times have become the gating factor.

US power demand for capital-intensive projects

2025		31 GW
2027E		66 GW

Source: Goldman Sachs Research

A plant on hold: The stakes are concrete. USA Rare Earth approached Cherokee County, S.C. in February about a $1B facility with roughly 500 jobs that needed 70 MW within two years, yet the site had capacity for just 1 MW until a state senator pushed Duke Energy to commit.

Local pushback: Opposition is now a screening factor too. Some 22% of consultants cited community resistance as grounds to drop a site, and Data Center Watch counted at least 45 projects worth about $68B blocked or delayed between April and June, after 75 worth $130B in the first quarter.

Who wins ground: Sites with secured power increasingly win on both price and speed. Developers and brokers who document available capacity before going to market hold the edge, and groups like Greater New Orleans Inc. are gathering that data early with state-backed certification funding.

➥ THE TAKEAWAY

What's next: Expect more local governments to press utilities for faster interconnection and more scrutiny of where campuses land. For owners and developers, lining up power before entitlements is becoming the clearest path to winning the next capital-intensive deal.

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✍️ Editor’s Picks

Tax savings: R.E. Cost Seg combines engineering expertise, CPA-ready deliverables, audit support, and digital tools designed to make cost segregation more manageable for property owners and advisors. (sponsored)
Breakup fight: Two H&R REIT investors, RBC and Mill Pond, plan to vote down the REIT's five-way breakup on Nov. 13, arguing the deal favors its CEO.
Spread squeeze: US CLO issuance slipped to $41.1B in September, the weakest month since April, as managers leaned on refis and AAA spreads tightened to 122 bps.
Servicing stress: CMBS special servicing climbed to 11.49% in September, the highest since 2013, with retail, lodging and multifamily stress spreading beyond office.
Yields bite: Listed global real estate fell 5.9% in September, cutting its 2026 total return to 2.4% as the 10-year Treasury pushed toward 5.3%.
Hike odds: Bond traders lifted the odds of an Oct. 28 Fed rate hike to 47% from 22% in a day, after September inflation ran at 3.7%.

🏘️ Multifamily

Debt wall: A slow rent recovery is colliding with maturities, IPA warns, with $864B of CRE debt due in 2026 and apartments making up about a third of it.
Village loan: SK Development landed a $203.5M construction loan for a 184-unit East Village project, where vacancy sits near 2% and rents average about $5,440.
Rental pivot: Houston's SFR demand keeps climbing as high home prices push more residents to lease rather than buy, RealPage reports.

🏭 Industrial

IPO delay: Blackstone-backed data center operator AirTrunk is reportedly delaying its $1.5B IPO, amid choppier capital markets.
Shovels down: South Florida's industrial pipeline fell 42% to 3M SF, as rising costs and power shortages stall new warehouse starts.
Corridor buy: Logistics Property Co. paid about $58M for a fully leased 716K SF industrial building in suburban Romeoville, its first value-add purchase.
Portfolio trade: Bahrain's Investcorp bought an eight-building greater Boston industrial portfolio for $76.5M, well above the roughly $62.3M the seller paid in 2021 and 2022.

🏬 Retail

Marquee return: Rick Caruso and Paramount will reopen the Bay Theater at Palisades Village, dark since the January 2025 wildfire, adding an entertainment draw to the recovering center.
Orlando grocer: Phillips Edison paid roughly $69M for a grocery-anchored shopping center in the Orlando area, CommercialSearch reports.
Maui anchor: 11North Partners landed $96M from PNC to help fund its $155M purchase of two grocery-anchored centers in Lahaina, its first Hawaii deal.

🏢 Office

Scarcity premium: First-generation trophy office rents are rising more than 20% a year, as 21M SF of 2026 absorption meets a near-record-low pipeline.
Lab campus: King Street Properties secured a $237.7M Starwood loan to refinance a 582K SF life sciences campus near Raleigh anchored by Novartis.
Medical refi: RMR Group landed a $272.1M refinancing for a Cedars-Sinai medical office portfolio in LA, repaying about $267M of debt due in early 2027.
HQ lease: Sentinel Technologies signed a full-building 63,409 SF headquarters lease in Lisle, Illinois, its first HQ move in more than 30 years.

🏨 Hospitality

Margin pinch: September's Fed hike is squeezing hotel owners already running lean, pushing operators toward automation as costs outpace RevPAR growth.
Hotel split: India's Lemon Tree Hotels is moving to spin its owned assets into a separately listed company called Fleur, CoStar reports.

📈 CHART OF THE DAY

Apartment insurance costs have more than doubled since 2019, with premiums easing across the Sunbelt in 2025 while continuing to climb in coastal markets, particularly California.

CRE Trivia (Answer)🧠

Pennzoil Place. Developer Gerald Hines hired Philip Johnson and John Burgee for the trapezoidal bronze towers, which New York Times critic Ada Louise Huxtable crowned the "building of the decade" in the mid-1970s.