Urban Land Institute and Heitman report ties commercial property siting to power access

Power access has moved alongside location as a determinant of where commercial real estate capital goes, according to a new report from the Urban Land Institute and Heitman.

The study, shared exclusively with Commercial Observer, projects global data center investment will reach $7.6 trillion by 2030, with $3 trillion of that directly connected to real estate.

Laura Craft, Heitman's global head of portfolio sustainability strategies, said the industry's old shorthand no longer covers the decision: "Many times over it's been thought that real estate value was driven by location, location, location, but increasingly access to reliable, deliverable power is becoming another critical determinant of where development can occur and where capital's flowing. In many markets today the demand exists, but does the power also exist to support the growth?"

ULI chief impact officer Aimee Witteman said Pittsburgh and parts of the industrial Midwest are well positioned to benefit from the AI-driven real estate environment because of legacy infrastructure — transmission connections, substations and former manufacturing sites. She stressed that the amount of power alone won't decide it: markets that make smarter use of their existing electrical grid also benefit. Texas and New York are advancing virtual power plants, she noted, while Mid-Atlantic partnerships are showing how batteries can unlock additional capacity faster while saving on expenses.

The report's beneficiary list extends beyond data centers to pre-approved powered land, battery storage properties and industrial facilities. Craft said industrial properties will need more automation and robotics over time, which will require resilient power sources. All asset classes will require a higher level of AI integration, she said, and existing properties with excess power — or the ability to add on-site technologies that can be sold as a revenue source — will stand out.

Earlier this month, Heitman and Andover announced self-storage joint ventures covering more than 106 properties across 16 states, according to PRED's records.