Real estate services firm JLL said on Tuesday that artificial intelligence (AI) data center construction projects — especially in the Dallas/Fort Worth area and around Washington, D.C. — are generating new demand for warehouse space and pushing rents higher in the third quarter.
Companies such as Alphabet, Microsoft, Meta and Amazon are pouring huge amounts of capital into the race to dominate the field of artificial intelligence.
Running AI requires enormous amounts of electricity to power servers and computer chips, and that equipment must be cooled to prevent overheating.
JLL noted in its third-quarter industrial real estate market report: "The expansion of data centers is driving enormous industrial demand in major freight hubs such as Dallas/Fort Worth; suppliers and infrastructure providers are clustering around hyperscale data center campuses."
JLL said the average asking rent for warehouses rose to $10.55 per square foot in the third quarter, up 3.2% from a year earlier — the fastest annual growth rate since the second quarter of 2024.
That increase is based on so-called "triple-net leases," under which tenants pay not only base rent but also property taxes, insurance and maintenance costs for common areas.
JLL pointed out that the expansion of infrastructure-intensive industries is changing tenant composition and the distribution of demand; among them, demand from tenants in construction, telecommunications and utilities-related industries has increased.
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