09/29

In this blog, we’ll tackle the data center boom from both the CRE and residential side of real estate. While AI is getting most of the attention now, it’s important to note that there are other types of data centers, too, including facilities for cloud storage.

Here’s what to know from the commercial side:

So far, the presence, or promise, of a data center has had a positive impact on the local CRE market. Here are some findings from NAR:

• Property values: 50% of commercial REALTORS® report increased nearby commercial property values.
• Space demand: 42% report an increased demand for nearby commercial space.
• Target sectors: This rising demand is heavily concentrated in industrial properties (58%) and vacant land (38%).

What about the residential side?

The benefits or drawbacks of having a data center in your backyard, at least when it comes to property values themselves, are a lot less defined. In fact, NAR published a report in September saying, “There’s No Single ‘Data Center Effect’” so far on every single market around a data center and that the impact on real estate is dramatically different depending on the local market.

Unlike the commercial side, survey respondents were mixed on whether data centers would be a good thing for their market – with a quarter of agents seeing a positive effect on nearby home values and 22% of respondents reporting a negative one. In addition, the concerns of residents or possible future residents seem to be in line with the national headlines, with more than half of REALTORS® saying they often hear client concerns about energy (61%) and water (56%) costs/use due to a data center’s proximity.

For its part, NAR leadership is acknowledging that data centers are likely a hot-button issue in the communities where they are housed – or could be built. However, that’s where the market expertise of all real estate professionals can really shine.

“We do not see evidence of weaker housing markets in counties with a large data center presence,” said NAR’s Chief Economist Lawrence Yun. “But these are county-level numbers, and they can’t tell us what happens to an individual home next to a facility. That’s why local knowledge and credible data matter so much right now.”

As you can see, questions about data centers and everything that comes with them will continue into 2027 and beyond. Trust our teams to continue to stay on top of the trends that affect our markets. In addition, we promise to keep delivering top-notch title and escrow services no matter what the future holds. Have questions about your specific market? Reach out to your local branch anytime!