Power Surpasses Labor as Key Driver in Industrial Real Estate Site Selection, Transwestern Reports

Power availability has emerged as a dominant factor in industrial real estate site selection, surpassing labor considerations for many users, according to research released by Transwestern Development Company. The shift reflects rising energy demand driven heavily by data center expansion, fundamentally reshaping conversations around industrial real estate development.

Transwestern reported that power now ranks as the second most important site-selection driver for industrial users, trailing only transportation access. The finding marks a significant departure from traditional industrial real estate development priorities, where labor availability and cost historically played a more prominent role.

Data Centers Drive Energy Demand in Industrial Markets

The increasing imperativity of energy for industrial real estate stems largely from the rapid expansion of data centers. This trend is reshaping how developers and users evaluate potential sites for industrial real estate development projects.

The research, published in February 2026, examines how rising energy requirements are influencing decision-making processes across U.S. industrial markets.

Research Team

The research was conducted by Transwestern's research services team, including Matt Dolly, Research Director based in Orlando, Florida; Hans Nordby, Executive Managing Director of Research in Boston, Massachusetts; and Elizabeth Norton, Senior Managing Director of Research Services in Washington, District of Columbia.

Sources

Transwestern - The Increasing Imperativity of Energy for Industrial Real Estate