Industrial commercial real estate has traditionally been valued on location, square footage, clear heights, and transportation access. The 2026 landscape adds electrical infrastructure availability as an equal consideration. Power infrastructure has become as critical as these traditional factors, as data centers, advanced manufacturing, and automated warehouses create unprecedented electrical demand.

Industrial property valuations increasingly reflect power capacity alongside physical building characteristics. Understanding these evolving dynamics requires recognizing how electrical infrastructure transforms acquisition evaluation and determines whether assets can serve realistic tenant demand.

Here, SVN® International provides context on these changes and how they can affect industrial commercial real estate opportunities.

The Power Shift: From Square Feet to Kilowatts

The most fundamental change in industrial commercial real estate is how properties are priced and leased, with electrical capacity becoming a primary value driver alongside square footage.

Data center pricing is now structured as dollars per kilowatt-month rather than per square foot. For example, colocation pricing moved from $120 per kilowatt-month in 2021 to $184 per kilowatt-month in 2024. This reflects electrical capacity as a scarce resource. Manufacturing facilities are increasingly evaluated on available power delivery rather than just floor area.

Site selection has transformed correspondingly. Speed to power is now the primary criterion, ranked above labor availability, which dominated for decades. Companies evaluate interconnection timelines alongside traditional metrics, with power availability determining which markets attract investment.

For investors, this means assessing electrical infrastructure as rigorously as building conditions. Properties with inadequate capacity face limited tenant pools, while sites with available power command premiums. Understanding how these factors affect valuations shapes acquisition positioning.

The Power Spectrum: Understanding Different Industrial Needs

Not all industrial properties require identical electrical infrastructure. Understanding these differences helps investors match assets to appropriate tenant types.

Traditional Warehouse and Distribution: Conventional operations require power for lighting, HVAC, dock equipment, and offices. While automation increases requirements beyond historical norms, these facilities remain manageable within existing grid infrastructure in most markets.

Advanced Manufacturing: Semiconductor facilities require 200 megawatts initially, scaling to 1,200 megawatts at buildout. EV battery plants and pharmaceutical manufacturing demand similar infrastructure. These facilities require unprecedented electricity while employing relatively small workforces, creating site selection centered on utility capacity rather than labor pools.

Data Centers: Hyperscale facilities demand 100-300 megawatts. By 2028, data centers could consume 6-12% of total U.S. electricity, up from 4% in 2023. Employment is minimal — often just dozens of people — compared to hundreds of megawatts, creating dramatically different investment profiles than traditional industrial.

Matching property power capacity to realistic tenant universes determines marketability. Overbuilding electrical infrastructure may not justify costs for conventional tenants, while underestimating power needs limits marketability to advanced manufacturers prioritizing electrical capacity delivery timelines.

Power Constraints Reshaping Market Dynamics

Electrical infrastructure limitations create divergent outcomes across industrial markets, with power availability determining development velocity and property values.

Interconnection timelines extend 5-10 years in constrained markets as aging infrastructure struggles with demand. Data centers, manufacturing reshoring, and transportation electrification compete simultaneously for limited capacity.

Markets diverge based on power availability. Texas markets (Dallas, Austin, San Antonio) attract development through available capacity. Arizona and New Mexico pursue transmission partnerships. Some markets face restrictions on power-intensive developments despite developer interest.

Developers respond by pursuing on-site power generation — combined heat and power systems, microgrids, battery storage — providing timeline certainty when interconnection queues extend years.

Acquisition due diligence now includes utility capacity assessments: transformer capacity, substation proximity, feeder availability, and local utility upgrade timelines. Properties with shovel-ready power infrastructure command premiums reflecting competitive advantage in constrained markets.

Evaluating Power Infrastructure: SVN’s Advisory Approach

Assessing electrical infrastructure requires local market intelligence and technical expertise beyond traditional square footage analysis.

Investors now evaluate available power capacity at sites. But local regulatory environments vary substantially, with some jurisdictions welcoming facilities bringing tax base expansion while others impose restrictions based on grid constraints.

SVN’s network across 225+ offices provides intelligence on local power availability that national databases cannot capture. Industrial specialists understand utility relationships and grid constraints in their regions, sharing insights on power-constrained and power-advantaged markets as conditions evolve.

Due diligence in 2026 includes traditional factors plus a comprehensive electrical infrastructure assessment. Properties marketed without electrical capacity documentation face valuation uncertainty as buyers cannot determine tenant limitations without independent utility assessments.

Strategic Positioning for 2026

Industrial commercial real estate fundamentals remain important as location, building quality, and transportation access still drive valuations. Power infrastructure has joined these as an equal consideration. Some properties succeed with conventional electrical capacity serving traditional tenants, while others require infrastructure rivaling small cities for advanced manufacturing and data centers.

Investors benefit from advisors who understand both traditional metrics and emerging power dynamics. As electrical constraints reshape markets, local intelligence on power availability provides a competitive advantage in identifying well-positioned properties. Whether evaluating warehouses, manufacturing facilities, or data centers, understanding electrical capacity alongside square footage determines outcomes.

Connect with SVN’s industrial specialists to discuss how power infrastructure affects your acquisition strategy.

Industrial property valuations in 2026 increasingly reflect electrical infrastructure capacity alongside traditional metrics, fundamentally changing how investors evaluate acquisitions:

  • Power infrastructure has emerged as a primary site selection criterion, surpassing traditional factors like labor availability in many markets
  • Industrial leases are increasingly structured around electrical capacity (kilowatts and megawatts) rather than exclusively square footage pricing
  • Sites with available power are commanding significant premiums as electrical constraints cause development delays across markets

Different industrial property types require vastly different power, from conventional warehouses to advanced manufacturing, demanding hundreds of megawatts