Data Center Development Cost Guide 2025

DATA CENTER DEVELOPMENT COST GUIDE 2025

DATA CENTER LAND OVERVIEW DATA CENTER LAND PRICING

NORTH AMERICA: DATA CENTER LAND TRANSACTIONS 2014-2024

NORTH AMERICA: DATA CENTER LAND TRANSACTIONS 2015-2024

Hyperscaler vs. Colocation Provider Pricing

Established vs. Non-Established Markets

$1,000.00

$20

$20

$100.00

$15

$15

$10.00

$10

$10

$ / SF

$1.00

$5

$5

Weighted Avg ($ / SF)

Weighted Avg ($ / SF)

$0.10

$-

$-

$0.01

2017

2021

2017

2015

2021

2018

2015

2019

2016

2018

2019

2016

2022

2023

2020 2024 Hyperscaler Pricing Colocation Provider Pricing 2022 2023

2024

2020

Nov-13

Apr-15

Aug-16

Jan-18

May-19

Oct-20

Feb-22

Jun-23

Nov-24

Established Markets Non-Established Markets

Note: Bubble size corresponds to acres sold Source: Cushman & Wakefield Research

Note: Data center land transactions with minimum 10 acres, Hyperscalers = Apple, AWS, Google, Meta, Microsoft

Source: Cushman & Wakefield Research

Data center demand is heightened as AI, cloud storage and an increasingly digitalized world outpace the available market capacity, confirming undersupply conditions are a norm in the industry. Developers are turning to emerging and tertiary markets with available land and power, while most established markets face shortages of both. Major players in the data center industry are aggressively pursuing larger parcels, especially those with power commitments in place, to accommodate future expansion and capture pent-up demand. With limited suitable options in dominant data

center markets and upward pressure on land values, interest has shifted toward rural areas where suitable options are more abundant and affordable. Despite the interest in powered land, developers continue to acquire prime parcels in strategic locations, with plans to secure power later through local utilities, renewable energy farms or small modular reactors. As a result, average U.S. data center land prices for parcels 50 acres or larger have increased 23%, from $4.39 per square foot (psf) in 2023 to $5.40 psf in 2024 through October. 1

Hyperscalers currently hold a significant advantage over many colocation providers in site acquisition due to their superior access to capital and ability to self-fund. This financial strength allows hyperscalers to outcompete colocation providers, especially for highly desirable powered-land sites. By avoiding the impact of higher interest rates, hyperscalers can make more attractive offers while still seeking ways to reduce costs. This has driven their focus to the outskirts of established markets and into emerging markets where land and power availability are less constrained, helping to stabilize average prices. For example, AWS recently purchased over 1,000 acres in Fredericksburg, Virginia, while Microsoft

acquired roughly 500 acres in Plano, Illinois, just west of Chicago. The capital advantage of hyperscalers is also evident in their ability to secure highly sought after powered land sites. From 2022 to 2024, the cost of such sites (10 acres or more) for hyperscalers rose from $2.89 psf to $5.38 psf as demand for data centers continues to grow in the generative AI era. In contrast, colocation providers have seen the weighted average cost of comparable land fall from $14.10 psf in 2022 to $5.68 psf in 2024. The higher prices paid by colocation providers often reflect their acquisition of higher-value land in more urban environments.

1 L and price data is based on a wide swath of geographies, where site plan is approved, or special exception is approved for rezoning.

10

11

Cushman & Wakefield