Data Center Investment in Dallas-Fort Worth
Dallas-Fort Worth sits third nationally for data center inventory and investment volume. AI demand pushed pricing 18% higher in 2025, but power constraints are getting real. Richardson Telecom Corridor and CyrusOne's legacy holdings dominate the landscape, while newer hyperscale builds chase available power in Mesquite and Grand Prairie. Transaction volume hit $2.8B in 2025, driven by three hyperscale trades above $200M each.
Market Context
Cap Rate Range
4.2%-5.8% for stabilized facilities, with premium single-tenant hyperscale trading below 4%
Current Vacancy
2.8% across all facility types, with wholesale practically zero and retail colocation at 4.1%
Rent Trend
Retail colocation up 22% YoY to $165/kW/month, wholesale power averaging $48/kW/month
Absorption
168MW absorbed in 2025, 40% above five-year average as AI workloads accelerate
Price Per Unit Trend
Price per MW ranges $8.2M-$12.4M depending on redundancy and age, up from $6.8M-$9.1M in 2024
Transaction Volume
$2.8B in 2025 across 14 transactions, with single-asset trades averaging $156M
Submarket Analysis
Richardson Telecom Corridor
4.8%-5.4% capVacancy
1.2%
Avg Rent (1BR)
$172/kW retail, $52/kW wholesale
Limited expansion capacity due to power constraints, existing facilities command premium
OM Tip
Emphasize fiber density - 15+ carriers on-net typical, plus Meet Me Room connectivity
Mesquite/Garland
4.4%-5.2% capVacancy
3.8%
Avg Rent (1BR)
$158/kW retail, $46/kW wholesale
Primary expansion zone with 240MW planned through 2027, Oncor working on additional substations
OM Tip
Document utility agreements and future power allocations - buyers paying 15% premiums for secured capacity
Grand Prairie
5.1%-5.9% capVacancy
4.2%
Avg Rent (1BR)
$148/kW retail, $44/kW wholesale
Emerging hyperscale hub, three 50MW+ facilities under construction, limited retail presence
OM Tip
Focus on PUE ratings and cooling efficiency - newer builds achieving 1.18-1.22 PUE
Irving/Las Colinas
5.2%-6.1% capVacancy
6.1%
Avg Rent (1BR)
$139/kW retail, $41/kW wholesale
Slower absorption but stable enterprise demand, older facilities facing modernization pressure
OM Tip
Highlight any recent infrastructure upgrades - legacy facilities need N+1 redundancy minimum
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What Your OM Needs to Address
Power Infrastructure Detail
Break down utility feeds, transformer capacity, generator backup, and UPS systems with specific MW ratings and redundancy levels
Data to Include
Oncor service agreements, backup generator fuel capacity (hours), UPS battery runtime, any secured future power allocations
Cooling System Documentation
HVAC redundancy levels, PUE ratings by season, chiller capacity, and any liquid cooling infrastructure for high-density deployments
Data to Include
Actual PUE performance over 24 months, cooling capacity per rack, ambient temperature design specs, water usage effectiveness if applicable
Fiber Connectivity Matrix
List all carriers with physical presence, dark fiber availability, and latency to major internet exchanges
Data to Include
Carrier agreements and terms, lit vs dark fiber capacity, latency measurements to Dallas NAP and major cloud on-ramps
Tenant Diversification Analysis
Revenue concentration by tenant type, lease terms, and SLA commitments with actual uptime performance
Data to Include
Tenant credit ratings, cross-connect revenue, managed services revenue, actual vs contracted uptime over 36 months
Expansion Capacity Planning
Available white space, additional power capacity potential, and any zoning or permitting constraints
Data to Include
Utility capacity studies, available land for expansion, current zoning allowances, any approved but unbuilt phases
Operating Cost Breakdown
Electricity costs, maintenance contracts, staffing levels, and insurance costs with benchmarking data
Data to Include
Oncor rate schedules and any demand charges, maintenance contract terms and escalations, 24/7 staffing costs, cyber insurance coverage
Investment Outlook
Short Term
AI demand keeps pushing rents higher, but power availability becomes the limiting factor. Expect 12-15% rent growth through 2026 in submarkets with available capacity. Stabilized assets with secured power will see cap rate compression of 25-40bps.
Medium Term
New utility infrastructure comes online 2027-2029, opening expansion opportunities in Mesquite and potential new submarkets in Denton County. Edge computing requirements drive smaller facility demand, creating opportunities for 5-15MW builds near population centers.
Long Term
DFW cements position as the third hyperscale market after Virginia and Phoenix. Quantum computing and advanced AI create demand for specialized facilities with different infrastructure requirements. Climate resilience becomes a bigger factor as extreme weather events impact operations.
Buyer Profile
REITs dominating stabilized acquisitions above $100M. Private equity targeting value-add opportunities in older facilities needing modernization. Hyperscale operators buying land for build-to-suit, paying $2.8M-$4.2M per acre for sites with utility access.
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