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Data center developers are pursuing bigger parcels and looking beyond established hubs because AI, cloud storage and broader digitization are increasing demand while suitable land and power are constrained. Cushman & Wakefield findings summarized by Building Design + Construction show the scale of the shift: U.S. land for data-center parcels of at least 50 acres averaged $5.40 per square foot through October 2024, versus $4.39 in 2023, while the average parcel procured reached 224 acres.
That does not make rural or tertiary locations an automatic substitute for major hubs. Established markets still provide denser fiber, lower latency, stronger infrastructure and incentives. The practical decision is to balance parcel scale, power timing, network performance, infrastructure and workload requirements rather than choosing a location by land price alone.
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The December 13, 2024 report describes a market in which developers are moving toward larger sites and considering emerging or tertiary markets as primary locations become harder to secure. Demand is being driven by AI operations, cloud storage and an increasingly digitalized economy, while land and power resources in established markets face pressure.
Large operators are not necessarily abandoning traditional hubs. Instead, they are adding options where a project can obtain enough land for current buildings, substations, cooling equipment, roads, stormwater controls and future phases. Expansion capacity matters because a parcel that works for one building may not support the electrical and physical requirements of a later campus.
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The figures are findings reported by Cushman & Wakefield and summarized by Building Design + Construction. They describe transactions and observations through October 2024, not a current 2026 market forecast. The published summary does not provide the guide’s sample definition, methodology or calculation details.
What the reported land and parcel figures show
| Measure | Reported figure | Qualification |
|---|---|---|
| U.S. land price for parcels of at least 50 acres | $5.40 per square foot | Average through October 2024 |
| Comparable 2023 land price | $4.39 per square foot | Average reported for 2023 |
| Year-over-year change | 23% increase | Calculated and reported in the 2024 summary |
| Average parcel procured | 224 acres | As of October 2024 |
| Change in average parcel size | 144% larger | Compared with the 2022 average, according to the report |
| Established-market parcel average | 190 acres | Reported average in the summary |
| Emerging or tertiary-market parcel average | 340 acres | Reported average in the summary |
These numbers point in two directions at once. Land for large sites became more expensive, yet the average acquisition became substantially larger. Developers appear willing to secure more acreage when it protects expansion potential or improves the chance of assembling a viable power and infrastructure plan.
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Why developers want larger parcels
Expansion is part of the initial design
A data center campus requires more than the footprint of its first server building. Site planning must account for additional halls, electrical yards, generators, cooling systems, fuel storage where applicable, internal circulation, security setbacks, water management and construction staging. A larger parcel allows these elements to be arranged without forcing every future phase into a constrained site.
The report quotes John McWilliams, identified as Head of Data Center Insights, Research Manager: “Major players in the data center industry are continually seeking larger parcels to accommodate future expansion and capture pent-up demand, aggressively pursuing those which have power commitments attached to them.” The statement links acreage and power: land has value when it can support a credible long-term operating plan, not merely when it is inexpensive.
Primary markets have fewer suitable options
Established hubs often contain limited tracts with the right zoning, road access, utility corridors and environmental characteristics. When several requirements must be met simultaneously, the supply of usable land is smaller than the supply of nominally vacant land. Emerging and tertiary locations can offer larger, more contiguous parcels and may allow a campus plan that would be difficult to assemble in a mature market.
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Large sites can preserve strategic flexibility
Buying a strategic parcel before every utility detail is finalized can preserve options, but it also creates execution risk. The project team must test whether transmission capacity, substations, generation arrangements, water resources, roads and permitting can catch up with the land purchase. Acreage is therefore an option on future development, not proof that a site is buildable at the intended scale.
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The choice is a tradeoff among physical capacity, connectivity, timing and cost. The report identifies advantages that established markets tend to retain, while noting that less-established locations may offer more land and lower cost.
| Decision factor | Established hub | Emerging or tertiary location | Question for the project team |
|---|---|---|---|
| Parcel scale | Suitable large tracts are scarcer; reported average parcel size is 190 acres. | More room for contiguous expansion; reported average is 340 acres. | Can the site accommodate the full campus plan and later phases? |
| Land cost | Competition and scarcity can push values upward. | May provide larger parcels at lower cost, subject to site and infrastructure work. | Does the land saving survive utility, road, water and permitting costs? |
| Fiber and latency | Typically denser, more diverse fiber and lower latency. | Network routes may be less diverse or require new extensions. | Are carrier routes physically diverse and adequate for the workload? |
| Infrastructure | Stronger existing infrastructure is a cited advantage. | New roads, substations or other works may be needed. | Who pays for upgrades, and what is the delivery schedule? |
| Incentives | Established markets may offer government incentives. | Incentives vary by jurisdiction and must be confirmed locally. | Are incentives enforceable, available to this project and timed to construction? |
| Power timing | Existing utility relationships may shorten some steps, but capacity can be constrained. | A large parcel may be acquired before power is fully committed. | What is contractually committed, and what remains a development assumption? |
There is no universal winner. A cheaper, larger site can lose its advantage if a required transmission connection takes longer than the customer schedule. Conversely, a premium hub can be rational when low latency, carrier diversity and existing infrastructure are essential.
Power commitments are changing the order of decisions
Power availability has become a central site consideration. The report says developers are transacting on strategically important parcels while planning to secure power later through utilities, renewable energy farms or small modular reactors. This describes a sequencing strategy, not a guarantee that any of those sources will be available to a particular project.
Separate four levels of power certainty
- Physical potential: the region appears to have generation or transmission resources.
- Utility feasibility: the utility has reviewed the load, interconnection point and upgrade requirements.
- Contractual commitment: capacity, delivery conditions and milestones are documented in an agreement.
- Operational readiness: the connection and associated equipment are commissioned before the facility needs full load.
A land purchase should identify which level has been achieved. Marketing language about proximity to a substation is not equivalent to a firm power commitment. Construction schedules, financing assumptions and customer delivery dates should be tied to documented milestones and explicit contingencies.
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Evaluate alternative supply plans without treating them as interchangeable
Utility service, renewable-energy arrangements and small modular reactors involve different permitting, interconnection, construction and operating dependencies. A project may examine several paths, but each requires its own technical and legal diligence. The relevant question is not simply how many megawatts a concept could produce; it is when dependable power can reach the site under the project’s operating conditions.
Latency determines whether a remote site is practical
Established hubs generally offer lower latency and dense, diverse fiber. Those characteristics matter when a workload must exchange data with users or devices almost immediately. The report names autonomous vehicles, Internet of Things systems, content delivery, financial trading, gaming and healthcare as examples in which latency can be important.
AI operations may tolerate somewhat higher latency because ultra-low response times are not always necessary for AI users, according to the report. That does not mean every AI workload can move anywhere. Teams still need to map data sources, model-training pipelines, storage locations, customer interfaces and compliance requirements before accepting a longer network path.
Use a workload-based network test
- Identify where data is generated and where users or devices are located.
- Separate interactive traffic from batch training, backup and archival transfers.
- Require diverse physical fiber routes rather than relying on two services that share one corridor.
- Measure the latency and availability requirement for each application instead of assigning one threshold to the entire campus.
- Price carrier extensions and ongoing connectivity alongside the land purchase.
How land cost should be evaluated
The reported U.S. average of $5.40 per square foot for parcels of at least 50 acres, compared with $4.39 in 2023, signals upward pressure in the market observed through October 2024. It is not a national quote for every parcel, and it does not represent the total cost of developing a data center.
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Build a comparable site-cost model
- Use the same campus capacity and expansion assumptions for every location.
- Show land acquisition, due diligence and entitlement costs separately from construction costs.
- Include utility studies, interconnection work, generation or renewable arrangements and schedule contingencies.
- Value fiber diversity, latency and carrier availability as operating requirements, not optional amenities.
- Record which assumptions are committed contracts and which depend on future approvals.
A practical site-selection sequence
- Define the workload: document latency sensitivity, geographic user distribution, power profile, storage needs and expansion timing.
- Set the campus envelope: reserve land for buildings, electrical systems, cooling, security, roads, water management and later phases before comparing acreage.
- Screen power first: obtain utility feasibility information, identify interconnection milestones and distinguish firm commitments from targets.
- Map network routes: verify carrier availability, route diversity and the cost and schedule of any new fiber.
- Test physical and regulatory constraints: review access roads, topography, drainage, environmental conditions, zoning and permitting authority.
- Compare total delivered cost: combine land, infrastructure, power, network and schedule exposure using the same assumptions for every candidate.
- Stage the decision: use contractual contingencies, option periods or milestone-based acquisition structures when power or entitlement outcomes remain uncertain.
Risks that accompany the move to emerging markets
Power arrives later than the land
A developer can control a large parcel yet lack a dependable date for energization. Mitigate this by requiring written utility milestones, identifying upgrade responsibilities and aligning construction starts with confirmed capacity.
Connectivity is less diverse than expected
A site may appear connected because one route is nearby, while a second route follows the same physical corridor. Require route-level evidence and budget for genuinely separate paths.
Infrastructure savings are overstated
Rural expansion can shift cost from land to roads, substations, water systems and workforce logistics. Keep those items visible in the comparison instead of treating them as later-stage details.
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Expansion land is not usable land
Flood risk, protected resources, easements, setbacks or incompatible zoning can remove acreage from the buildable envelope. Confirm the developable area before relying on the reported parcel size.
Workload assumptions change
A location selected for batch AI processing may be unsuitable if the service later adds interactive, user-proximate or device-controlled applications. Preserve network and power options that support the expected workload mix.
What the 2024 findings do—and do not—establish
The reported 23% land-price increase, 224-acre average acquisition and 190-acre versus 340-acre market comparison are useful indicators of the direction observed through October 2024. They do not establish a universal price for a particular state, utility territory or project type, nor do they quantify how much of the shift was caused by AI, cloud storage, digitization, land scarcity or power constraints. The short published summary does not provide causal weights or a forecast.
For a construction or development team, the durable lesson is methodological: treat land, power, fiber, latency, infrastructure and incentives as one interdependent decision. Larger parcels and emerging markets can unlock expansion, but only when the site can be made electrically, physically and operationally ready on the required schedule.
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