The Data Center Boom: How Texas is Capitalizing on the AI Revolution

The artificial intelligence revolution has transformed the data center sector from a niche real estate segment to one of the most dynamic growth markets in commercial real estate. At PlaceMKR, we've successfully positioned our portfolio to capitalize on this unprecedented demand surge across Texas markets.

Texas' Unique Data Center Advantage

Texas has emerged as a premier data center market due to several structural advantages:

1. Power infrastructure: Access to reliable, abundant, and relatively affordable power through the ERCOT grid ‍
2. Connectivity: Robust fiber networks and connectivity across major metros ‍
3. Land availability: Sufficient developable land at reasonable prices ‍
4. Business climate: Pro-business regulatory environment ‍
5. Talent pool: Growing technology workforce
6. Disaster resilience: Relatively low natural disaster risk profile compared to coastal markets

These advantages have made Texas a focal point for data center development, with demand accelerating dramatically since 2023 with the rise of AI computing requirements.

From Theory to Execution: Our Data Center Strategy

Our team recognized the emerging data center opportunity early in the cycle. Rather than competing directly with established data center REITs, we identified a specific market gap: securing strategic land positions with power access and entitlements, then partnering with operators or exiting to developers.

This approach led to one of our most successful transactions in 2024, where we:

1. Identified a site initially targeted for residential development
2. Discovered it had access to significant nearby power infrastructure
3. Successfully signed grid connection agreement for 240 MW
4. Created place for future international data center operator

The transaction delivered exceptional returns specifically because we recognized the land's highest and best use had shifted due to evolving market demands.

Power Availability: The New Development Currency

The most critical factor in current data center site selection is power availability. AI-focused data centers require 3-5x the power density of traditional facilities, creating unprecedented demand for sites with robust electrical infrastructure.

We actively track power availability across Texas markets, maintaining relationships with utilities and monitoring substation development plans. This intelligence allows us to identify opportunities where power capacity creates a competitive advantage.

Beyond the Hyperscalers: The Broader Ecosystem

While much attention focuses on hyperscale facilities, we're also tracking opportunities in:

• Edge computing facilities serving specific Texas submarkets

• Colocation facilities catering to mid-market enterprises

• Conversion of obsolete industrial buildings to data center use

• Ancillary real estate supporting the data center ecosystem

Looking Forward: The Next Wave

As the AI revolution continues, we anticipate sustained data center demand across Texas markets through 2025 and beyond. However, the most compelling opportunities will increasingly be found in secondary markets where power capacity exists but hasn't yet been fully priced into land values.

Our team continues to actively source data center opportunities throughout Texas, leveraging our market knowledge and relationships to identify sites with the critical infrastructure components needed to support this rapidly evolving sector.