Data Center Investment in Austin
Austin's data center market is white-hot right now. AI demand, Tesla's presence, and endless tech expansion created a perfect storm. Cap rates compressed 75 basis points since 2024. Power's getting tight, but Oncor's building out fast. If you're marketing a facility here, buyers want to see real power contracts and cooling redundancy details upfront.
Market Context
Cap Rate Range
4.75% - 6.25%
Current Vacancy
3.2%
Rent Trend
Up 18% year-over-year on colocation rates
Absorption
89MW absorbed in trailing twelve months
Price Per Unit Trend
$8,500 - $12,000 per kW for turnkey facilities
Transaction Volume
$1.8B in trailing twelve months, up 45% from 2025
Submarket Analysis
East Austin Industrial Corridor
4.75% - 5.5% capVacancy
1.8%
Avg Rent (1BR)
$185 - $220 per kW monthly
Tightest supply, three hyperscale facilities delivered 2025
OM Tip
Highlight fiber count and utility redundancy - buyers care about ERCOT connection details
Round Rock/Pflugerville
5.25% - 6.0% capVacancy
4.1%
Avg Rent (1BR)
Major expansion area, Samsung and Apple driving enterprise demand
OM Tip
Show proximity to tech campuses and available expansion land
Cedar Park/Leander
5.5% - 6.25% capVacancy
5.7%
Avg Rent (1BR)
Emerging market with lower power costs, three new facilities planned
OM Tip
Emphasize cost advantage and future capacity availability
South Austin/Buda
5.0% - 5.75% capVacancy
2.9%
Avg Rent (1BR)
Strong enterprise demand, limited developable sites remaining
OM Tip
Focus on scarcity value and existing tenant credit quality
Performance by Vintage
0
P
1
r
2
e
3
-
4
2
5
0
6
1
7
0
8
9
f
10
a
11
c
12
i
13
l
14
i
15
t
16
i
17
e
18
s
19
20
t
21
r
22
a
23
d
24
i
25
n
26
g
27
28
a
29
t
30
31
6
32
.
33
0
34
-
35
6
36
.
37
5
38
%
39
40
c
41
a
42
p
43
s
44
45
b
46
u
47
t
48
49
n
50
e
51
e
52
d
53
54
m
55
a
56
j
57
o
58
r
59
60
c
61
o
62
o
63
l
64
i
65
n
66
g
67
68
u
69
p
70
g
71
r
72
a
73
d
74
e
75
s
76
.
77
78
2
79
0
80
1
81
0
82
-
83
2
84
0
85
2
86
0
87
88
v
89
i
90
n
91
t
92
a
93
g
94
e
95
96
h
97
i
98
t
99
t
100
i
101
n
102
g
103
104
5
105
.
106
2
107
5
108
-
109
5
110
.
111
7
112
5
113
%
114
115
w
116
i
117
t
118
h
119
120
m
121
o
122
d
123
e
124
r
125
n
126
127
p
128
o
129
w
130
e
131
r
132
133
i
134
n
135
f
136
r
137
a
138
s
139
t
140
r
141
u
142
c
143
t
144
u
145
r
146
e
147
.
148
149
P
150
o
151
s
152
t
153
-
154
2
155
0
156
2
157
0
158
159
b
160
u
161
i
162
l
163
d
164
s
165
166
c
167
o
168
m
169
m
170
a
171
n
172
d
173
174
s
175
u
176
b
177
-
178
5
179
%
180
181
c
182
a
183
p
184
s
185
186
i
187
f
188
189
t
190
h
191
e
192
y
193
194
h
195
a
196
v
197
e
198
199
h
200
y
201
p
202
e
203
r
204
s
205
c
206
a
207
l
208
e
209
210
t
211
e
212
n
213
a
214
n
215
t
216
217
e
218
x
219
p
220
o
221
s
222
u
223
r
224
e
225
.
226
227
E
228
d
229
g
230
e
231
232
f
233
a
234
c
235
i
236
l
237
i
238
t
239
i
240
e
241
s
242
243
b
244
u
245
i
246
l
247
t
248
249
a
250
f
251
t
252
e
253
r
254
255
2
256
0
257
2
258
2
259
260
s
261
e
262
e
263
i
264
n
265
g
266
267
s
268
t
269
r
270
o
271
n
272
g
273
e
274
s
275
t
276
277
i
278
n
279
v
280
e
281
s
282
t
283
o
284
r
285
286
i
287
n
288
t
289
e
290
r
291
e
292
s
293
t
294
295
d
296
u
297
e
298
299
t
300
o
301
302
5
303
G
304
305
d
306
e
307
p
308
l
309
o
310
y
311
m
312
e
313
n
314
t
315
316
c
317
y
318
c
319
l
320
e
321
s
322
.
What Your OM Needs to Address
Power Infrastructure Detail
Buyers want to see actual utility contracts, not just capacity numbers
Data to Include
Oncor rate schedules, backup generator specs, UPS capacity, power usage effectiveness ratios by zone
Cooling Redundancy Documentation
Austin heat makes cooling critical - show your redundancy approach
Data to Include
CRAC unit specifications, N+1 vs 2N configuration, economizer hours, design temperature assumptions
Fiber Connectivity Map
Show actual carrier presence, not just who's 'available nearby'
Data to Include
On-net carrier list, fiber entrance facilities, cross-connect fees, diverse path routing
ERCOT Grid Exposure
Texas grid reliability concerns are real - address them head-on
Data to Include
Historical uptime during grid events, fuel contracts for generators, battery backup duration
Expansion Capacity
Most buyers want growth options given AI demand uncertainty
Data to Include
Available land, utility capacity reservations, zoning for additional density, construction timeline estimates
Tenant Concentration Risk
Single-tenant hyperscale deals need credit analysis depth
Data to Include
Tenant financial statements, lease guaranty structure, expansion/contraction rights, early termination penalties
Investment Outlook
Short Term
Expect continued cap rate compression through 2026. Power constraints will limit new supply, keeping occupancy above 95%. Rent growth should moderate to 8-12% as some new capacity comes online in Round Rock.
Medium Term
2027-2029 could see 150-200MW of new capacity if Oncor's grid upgrades stay on schedule. Cap rates might stabilize in the mid-5s for quality assets. Edge computing build-out creates opportunities in secondary submarkets.
Long Term
Austin's long-term fundamentals remain strong with continued tech job growth and Texas's business-friendly environment. Climate change concerns about cooling costs are offset by renewable energy expansion. Expect the market to mature with more specialized facility types.
Buyer Profile
Pension funds and REITs dominate hyperscale acquisitions. Private equity groups active in enterprise colocation deals under $75M. Foreign capital increasingly interested but wants US operating partners.
Marketing a data center property in Austin?
DealDraft generates professional offering memorandums with market-specific data and property-type expertise built in.
Create Your OM