You Are Underwriting Real Estate the Wrong Way

If your underwriting model as a 2026 commercial real estate investor doesn't include a power availability analysis, you're missing the most important variable in the market. Close to half of this year's planned data centre builds are projected to be delayed or cancelled due to insufficient grid infrastructure — not a marginal risk, but the defining execution challenge in the sector.

The Power Line Item Blindspot

Yet most due diligence processes still prioritise the traditional variables: location, zoning, construction costs, tenancy, comparables. Power gets a line item somewhere between the environmental assessment and the survey — rarely the first question, often the last.

Map power availability before evaluating sites. Use utility interconnection queues, FERC data, and regional grid operator reports to establish real power timelines before underwriting any data centre investment.

Cost Escalation and Early Procurement

Rising labour shortages, tariffs, and data centre demand are pushing construction costs higher, per JLL's cost analysis, making early procurement — including securing power commitments before land purchase or permitting — more critical than ever. The developers winning deals in 2026 are the ones who opened conversations with utilities two or three years ago.

The Paradigm Shift: From Rate Sensitivity to Power Readiness

New research is also challenging one of commercial real estate's long-standing assumptions: that lower interest rates automatically produce stronger returns. Rate sensitivity defined the 2010s and early 2020s; infrastructure readiness — power, connectivity, resilience — defines the decade ahead, a shift CBRE's economic outlook also points to amid slowing GDP growth and softening labor conditions.

The Secondary Market Advantage

The investors moving first are targeting secondary markets — Columbus, Indianapolis, Kansas City, Reno — proactively acquiring industrial land adjacent to existing power infrastructure before institutional capital catches on. Those who don't may find themselves in three to five years holding well-located, well-built assets that can't attract the tenants driving demand, because those tenants need power that isn't there.

Underwrite the electricity first. Then underwrite the building.