Why AI Infrastructure Is Reshaping Industrial Real Estate in Secondary US Cities

Artificial intelligence is rapidly transforming the geography of industrial real estate across the United States.

For decades, the country’s largest technology and data infrastructure investments remained concentrated in a handful of primary markets such as Northern Virginia, Silicon Valley, Dallas, Chicago, and Phoenix. However, the explosive growth of AI workloads, cloud computing, and hyperscale infrastructure is now pushing development far beyond traditional hubs into secondary and tertiary US cities.

Markets such as Columbus, Ohio; West Texas; Indianapolis; Wisconsin; Tennessee; Pennsylvania; and parts of Nevada and Michigan are increasingly emerging as strategic AI infrastructure destinations.

This shift is reshaping industrial real estate in ways few sectors have experienced before. Land values near substations are rising sharply, farmland rezoning battles are intensifying, logistics corridors are being reimagined, and communities once overlooked by institutional investors are suddenly attracting billions of dollars in hyperscale investment.

Recent reports from CBRE, JLL, Cushman & Wakefield, Brookings Institution, and regional development trackers suggest that AI infrastructure is no longer simply a technology story. It is increasingly becoming an industrial land, power, and economic development story.

Why Are AI Data Centers Expanding Beyond Traditional Tech Hubs?

The primary reason AI infrastructure is expanding into secondary cities is simple: traditional data center markets are running out of scalable power and land.

According to Cushman & Wakefield’s “Americas Data Center Update H2 2025,” capacity under construction across North America reached approximately:

• 25.3 gigawatts (GW)

with pre-commitment rates near:

• 89%.

At the same time, vacancy rates remained historically tight at approximately:

• 4.2%,

despite substantial new supply entering the market.

JLL’s “North America Data Center Report Year-end 2025” found vacancy rates held near:

• 1%
  for the second consecutive year.

These conditions have created intense competition for:

• developable land
• utility interconnections
• transmission capacity
• water resources
• power infrastructure

in established primary markets.

As a result, hyperscalers and AI infrastructure developers are increasingly seeking secondary markets that offer:

• cheaper land
• faster permitting
• abundant electricity
• access to transmission infrastructure
• reduced regulatory constraints

The AI boom is effectively decentralizing industrial real estate demand across the United States.

➡️ Read the related Post: The AI Infrastructure Boom in the US Is Shifting Data Center Growth Beyond Silicon Valley

Why Is Power Becoming More Important Than Location?

Historically, fiber connectivity and network density were the dominant factors driving data center location decisions.

Today, power availability has become the most important variable.

AI workloads require enormous amounts of electricity because advanced GPU clusters consume significantly more power than traditional cloud infrastructure.

Industry analysts increasingly note that:

• access to power now outweighs proximity advantages in many cases.

Developers are aggressively targeting areas near:

• substations
• transmission corridors
• retired industrial facilities
• legacy power infrastructure
• former coal plant sites

This trend is repricing industrial land across secondary markets.

According to multiple real estate analyses, industrial parcels with strong power access are now commanding premiums previously associated mainly with logistics corridors or urban infill sites.

The result is a new form of industrial competition where electricity infrastructure determines real estate value.

Why Are Secondary Cities Suddenly Attracting Billions in Investment?

The AI infrastructure boom is creating unprecedented investment flows into markets previously considered secondary or tertiary.

Columbus, Ohio

Central Ohio has emerged as one of the clearest examples of this transformation.

Between 2020 and 2025, the number of data center facilities reportedly increased by approximately:

• 1,800%,

reaching more than:

• 170 data centers.

The region is now considered the:

• 10th largest North American data center market.

Major hyperscale investments include:

• AWS projects exceeding $3.5 billion
• Google expansions
• Microsoft infrastructure investments
• Meta facilities
• Cologix’s planned $1 billion AI-focused complex
• Vantage campuses

Several factors make Columbus attractive:

• central US geography
• lower power costs
• strong fiber connectivity
• business-friendly regulation
• lower land prices compared with primary coastal markets

The market increasingly demonstrates how AI infrastructure can rapidly reshape regional industrial real estate ecosystems.

Indiana and the Midwest

Indiana is also experiencing accelerated hyperscale expansion.

Amazon, Microsoft, Google, and Meta projects are underway across multiple parts of the state, with reports tracking nearly:

• 30 proposed facilities.

Areas near:

• Indianapolis
• Northwest Indiana
• New Carlisle

have become increasingly attractive because of:

• lower industrial land costs
• utility access
• transportation connectivity
• proximity to Midwest population centers

Developers are now targeting regions once dominated primarily by:

• manufacturing
• warehousing
• agricultural uses

for AI infrastructure expansion.

Why Are Frontier Markets Becoming So Important?

JLL’s 2025 research found approximately:

• 64%
  of capacity under construction is now located in:
• “frontier” markets,
  meaning secondary and tertiary cities.

Key beneficiaries include:

• West Texas
• Tennessee
• Wisconsin
• Ohio
• Pennsylvania
• Nevada
• Michigan

This represents a major structural shift within industrial real estate.

Frontier markets offer several advantages:

• large developable land parcels
• lower acquisition costs
• reduced zoning conflicts
• stronger utility scalability
• lower congestion
• tax incentives
• easier expansion potential

CBRE’s “North America Data Center Trends H2 2025” also emphasized that:

• AI inference workloads increasingly favor proximity to end users.

This dynamic is creating broader geographic distribution patterns for AI infrastructure.

Rather than concentrating entirely in a few hyperscale hubs, operators increasingly require distributed infrastructure closer to regional population and enterprise centers.

How Is AI Infrastructure Reshaping Industrial Land Values?

One of the most significant impacts of AI infrastructure is the repricing of industrial land itself.

According to Cushman & Wakefield’s “Data Center Development Cost Guide 2025,” the average data center site size reached approximately:

• 224 acres during 2024,

representing an increase of roughly:

• 144%
  since 2022.

Some hyperscale AI campuses now exceed:

• 1,000 acres.

This scale dramatically changes industrial land dynamics in secondary markets.

Properties once valued primarily for:

• logistics
• manufacturing
• warehousing
• agricultural productivity

are increasingly being evaluated based on:

• electrical infrastructure proximity
• transmission scalability
• substation access
• utility interconnection potential

In many regions, industrial land near high-capacity substations is rapidly appreciating because developers view power access as strategically scarce.

Why Are Farmland and Rural Communities Becoming Battlegrounds?

The expansion of AI infrastructure into secondary cities is increasingly creating land-use tensions.

As hyperscale developers seek large sites with strong power access, agricultural land and rural communities are becoming major development targets.

Several Midwest cases illustrate this trend.

Reports from Wisconsin Farm Bureau and other regional organizations document growing opposition to large-scale rezoning proposals.

One proposed:

• 300-acre project in Preble County, Ohio

was reportedly withdrawn following significant local opposition.

Community concerns increasingly focus on:

• farmland loss
• environmental impact
• water consumption
• electricity demand
• noise
• tax incentives
• long-term land control

This reflects a broader national trend.

Industry reports indicate approximately:

• 50 active US moratoriums or restrictions
  related to data center development were under consideration as of early 2026.

The AI boom is therefore creating not only economic opportunities, but also political and social tensions over industrial land use.

How Is Industrial Real Estate Strategy Changing?

AI infrastructure is fundamentally altering industrial real estate investment strategies.

Traditional industrial development focused heavily on:

• transportation access
• labor availability
• logistics efficiency
• warehouse demand

Now, investors increasingly prioritize:

• power availability
• utility scalability
• transmission redundancy
• water access
• cooling feasibility
• local permitting environments

This is changing acquisition strategies for:

• institutional investors
• REITs
• developers
• infrastructure funds
• utilities

Industrial assets near power infrastructure are increasingly being viewed as strategic digital infrastructure opportunities.

Some developers are even repurposing:

• former manufacturing plants
• industrial campuses
• retired coal facilities

for AI-related infrastructure.

This convergence between digital infrastructure and industrial real estate is becoming one of the defining themes of the current property cycle.

Are AI Data Centers Creating Long-Term Economic Benefits?

The economic impact of hyperscale AI infrastructure remains a subject of debate.

Brookings Institution’s February 2026 report:
“Turning the Data Center Boom into Long-Term, Local Prosperity”
analyzed how hyperscalers are investing in smaller and medium-sized communities.

The report noted that large projects can generate:

• tax revenue
• infrastructure investment
• construction employment
• supplier activity
• secondary technology investment

However, Brookings also cautioned that:

• data centers do not automatically create large long-term employment ecosystems.

Many hyperscale facilities operate with relatively limited staffing once construction ends.

As a result, Brookings recommended:

• community co-investment models
• workforce development
• local technology ecosystem building
• public infrastructure partnerships

to ensure communities benefit more broadly from AI infrastructure growth.

The report highlighted Microsoft’s Wisconsin AI investments as an example of how infrastructure projects can potentially stimulate broader economic ecosystems when combined with intentional regional planning.

Why Are Utilities Becoming Central Players in Real Estate Development?

Utilities are increasingly shaping industrial real estate outcomes because power access has become the critical bottleneck for AI infrastructure expansion.

In many secondary cities, utility interconnection timelines now determine:

• project feasibility
• land valuation
• investment timing
• development competitiveness

Electric utilities are therefore becoming major strategic participants in:

• industrial site selection
• regional economic development
• infrastructure planning

In some cases, utilities are coordinating directly with hyperscalers and local governments to accelerate:

• transmission upgrades
• substation development
• generation expansion

This represents a major evolution in how industrial real estate markets function.

➡️ Read this Post: Why Singapore Is Becoming a Strategic AI Data Center Hub in Asia

The AI Boom Is Redefining America’s Industrial Geography

Artificial intelligence infrastructure is reshaping industrial real estate far beyond traditional technology hubs.

Research from CBRE, JLL, Cushman & Wakefield, Brookings Institution, and regional market analyses increasingly shows that the next phase of AI infrastructure growth will be heavily tied to:

• secondary cities
• frontier industrial markets
• power-rich regions
• utility-connected land corridors

The transformation is already visible across:

• Ohio
• Indiana
• Wisconsin
• West Texas
• Tennessee
• Pennsylvania
• Nevada
• Michigan

and many other emerging markets.

The AI economy is no longer concentrated solely in Silicon Valley or Northern Virginia.

Instead, it is creating a new industrial geography where:

• electricity infrastructure
• land availability
• regulatory flexibility
• regional connectivity

are becoming the defining drivers of real estate value.

For industrial real estate investors, developers, utilities, and local governments, the rise of AI infrastructure may become one of the most important structural shifts of the next decade.

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Core Insights Review contributors publish research-based analysis and editorial insights on commercial real estate, PropTech, smart infrastructure, sustainable construction, industrial real estate, and emerging technologies shaping the future of the built environment.