The Hunt For Data Center Sites Is Distorting Land Prices

The race to acquire land capable of powering new data centers is consuming the market for development sites nationwide.

Nationally, sales of land earmarked for future data center development totaled roughly $3.3B in the first three months of 2026, up 141% from the same period in 2025, according to data provided to Bisnow by Avison Young. Roughly 30% of all spending on development sites in the first quarter went to data center land deals, up from about 19% in 2025.  

The number of data center sites sold actually dropped, from 20 to 16, demonstrating that the value of land with the power and zoning to allow by right construction has skyrocketed as its availability has dwindled.

“It’s a little bit of the haves and have-nots,” CRG Chief Operating Officer Steve Schnur said. “If you're in a state that is a business-friendly state and you have access to power and you have a large piece of land, oh, my gosh, you're sitting on a gold mine.” 

Overall development site sales volume rose 55% year-over-year in Q1 to $11.1B, outpacing the acceleration in spending on other asset classes, including multifamily, industrial, retail and office. 

Prices for powered land continue to rise as the availability of power declines, Schnur said. In Q4 2025, developers only added 25 gigawatts of electricity capacity to their project pipeline, half of the capacity added the previous quarter.

With waitlists for new grid connections extending years into the future, if a landowner has immediate access to power, it is getting significant interest from both developers and users, he said. 

U.S. data center power demand is expected to increase from 31 GW in 2025 to 41 GW in 2026 and 66 GW in 2027, according to a report from Goldman Sachs. 

Alex Ern, a senior manager in Avison Young’s U.S. Capital Markets group, said prices have reached a point where industrial development on powered land doesn’t make financial sense in many cases. He said in Northern Virginia, for example, the industrial market has effectively migrated west, almost entirely due to the impact of the data center market on land pricing. 

A few key Northern Virginia deals illustrate how much the market has grown. Amazon’s data center arm scooped up 44 acres in Northern Virginia for $120M in February, up from $39.5M when the property was last sold in 2021. Amazon Web Services last year paid $700M for a campus in the area entitled for up to 3.5M SF of data centers — 1,272% more than the $51M the seller paid to put the site together in 2021 and 2022. 

Industrial developers started to compete with data center developers over powered land as they run into similar capacity issues. Automated warehouses can use up to 10 times as much power as more traditional industrial properties, according to an Oxford Economics report.

Some industrial properties are being marketed as powered land sites for data center development, a side of the sales market that has gotten “crazy,” Schnur said. 

“It’s wild,” he said. “It’s something we probably haven’t experienced in my couple of decades in the business.” 

Industrial investors are paying up for that power as a result. Development sales volume for the sector increased by roughly 65%, from about $1.4B to $2.3B, while the number of sites sold only rose by 19%, from 131 to 156.

“For powered land, the new high watermark is seemingly being set every month or every quarter,” Ern said. 

For data center developers seeking sites with power, fiber connectivity and access to water, there’s a finite amount of land that currently exists and can meet all of those needs, he said. 

Then, there is the growing issue of getting projects approved as the perception of data centers grows more negative. Areas where data centers are still being entitled, like Florida and Texas, are attracting increased investment as a result, Schnur said.

Data center land will likely continue to drive development land sales as society’s need for computing power is unlikely to slow down any time soon, Ern said. The biggest unanswered question for the growth of the sector, he said, is what happens if energy providers are unable to deliver more power, and how soon that could come to pass. 

But the market for other asset classes has still picked up, even though construction pipelines have dried up, as investors seem to be preparing for the next wave of development. 

Multifamily development sales volume increased from about $2B to $2.6B year-over-year. Mixed-use site sales climbed from about $1.2B to $2.4B.

Private buyers are behind the vast majority of development sales, accounting for 70% of Q1 transactions, according to Avison Young data. 

“It, at least to me, signals that investors are beginning to underwrite development again,” Ern said.  

Colliers Executive Vice President Anne Dempsey said today’s land deals are increasingly shaped by infrastructure access, municipal approvals, taxes and zoning. Even when buyers are interested, deals can stop making financial sense if the basis for the land is too high. 

“The hard part about land is construction costs go up and down, they can change 30%, but are rents changing 30%? Are they going up 30% to cover for that? No,” Dempsey said. “You can only pay so much for the land in order to make the deal work.”