- A PwC and ULI survey found 72.4% of industry professionals say insurance costs affect decisions in their markets, versus 45.3% naming energy and grid constraints a top disruptor.
- Grid capacity decides where new projects can be built, while insurance determines whether an investment works, steering capital toward Dallas-Fort Worth, Columbus and Phoenix.
- Utility and entitlement hurdles raise the scarcity value of existing buildings, especially in Midwest markets where assets trade below replacement cost.
Insurance costs now weigh on more real estate decisions than power-grid limits, according to the Emerging Trends survey from PwC and ULI, GlobeSt reported.
In the 2027 edition, 72.4% of surveyed industry professionals say insurance moderately or significantly shapes choices in their markets. Only 45.3% called energy and grid constraints a top disruptor.
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Two Costs, Two Decisions
The report separates the two. Power limits dictate where building can happen, while insurance determines whether a deal’s economics hold up.
A developer’s question is whether a site can be energized. An investor’s is whether operating costs still justify the price, and that question now reaches more of the market.
Power Is Steering Growth
Across the South Central region, capital is heading to data centers, defense and advanced manufacturing because power and permitting are available. Dallas-Fort Worth ranks first overall, as we noted in our look at the Emerging Trends rankings on October 27.
Columbus, at No. 19, ranks third nationally for data centers, with a semiconductor campus of about $28 billion at its center. Phoenix has widened from an affordability story into chips and data centers.
Scarcity Favors Owners
A digital infrastructure executive told the report’s authors that utility and entitlement hurdles make existing assets scarcer and more valuable.
Slower approvals expose developers to rate, cost and demand risk for longer. Buildings already standing benefit from that barrier to entry through firmer pricing and cap rates.
In the Midwest, Chicago, Cincinnati and Indianapolis offer purchases below replacement cost, a cushion that supports income even if rents don’t climb.
Why It Matters
Underwriting now opens with a blunt question: why this market, and why now? Supply limits, fragmented policy, AI demand and infrastructure needs have made geography a sharper call.
A national multifamily operator’s executive told the report’s authors that no single factor has reliably forecast rent growth since the turn of the century. Investors are shifting toward judging each market and each asset on its own.
What’s Next
Top-market scores are tightly bunched, so a few survey responses can reshuffle a city by several spots. Read the rankings as sentiment, not precise positions, and expect the criteria to keep evolving.
