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“These folks who were very judicious have run out of capacity,” said Meisel, whose team was marketing a fully approved, 21-acre site in Totowa that can support a 40-megawatt data center across 300,000 square feet.
Developers are now expanding where they can. JLL broker Tom Reilly noted that roughly 70 megawatts of capacity is coming to New Jersey
this year by way of new construction, including a new 300,000-square-
foot project at Equinix’s campus in Secaucus, as well as CoreSite’s newly approved, 85,000-square-foot facility on Emerson Lane in the town that will add another 15 megawatts.
Meantime, QTS’ new preleased facility in East Windsor, which is redeveloping a former McGraw Hill Financial complex on Princeton- Hightstown Road, follows a deal
that filled the remaining space at its expanded complex on Possumtown Road in Piscataway. Brokers also point to a new Databank facility just outside New Jersey, in Orangeburg, New York, which was preleased to an undisclosed AI company and will give way to a 30-megawatt second phase.
“The good news is it’s going to
add significant inventory,” Reilly, a managing director with JLL, said of the state’s development pipeline. “The bad news is, for us, a lot of it is pre-committed.”
He also pointed to an abundance of projects that are in planning stages but have yet to break ground, which would add almost 150 megawatts
of inventory. According to a recent report by JLL, those projects equate to around 850,000 square feet of new development, which would create coveted supply for AI deployments as well as life sciences and research users.
Meeting that demand is inherently complicated in New Jersey, with
its high utility costs and a power
grid that is already stretched. The challenge is only more acute with users seeking more scale than ever before to support AI platforms, such as ChatGPT and other large language models, requiring higher-density data centers that consume two or three times as much power per square foot.
Essentially, developers that were content to build 40- to 50-megawatt projects in past cycles may now need to think bigger — if the grid supports it. All the while, speed to market is
still critical.
“What happens is that, because
the supply has dried up so quickly, there’s not a lot of areas that have
a confluence of ample power and approvals or a box ready to go for AI,” Meisel said. “And what the AI folks are chasing right now is a clear, risk-free path to becoming one of the first on the ground.”
That hasn’t stopped developers from trying to meet the market. Greek Real Estate Partners, for instance, is increasingly conscious of which sites in its portfolio could accommodate a
major data center, given the interest it has fielded in recent months.
The developer is now actively engaging those tenants, which range from government agencies and
tech companies to large financial institutions.
“It’s become a bigger part of our marketing efforts now when we recognize the sites that have that infrastructure and seeing the amount of demand that sector’s throwing off,” GREP’s Greek said. “That has become central to some of our leasing strategy, especially in the preconstruction phase of a
project where we might be finishing entitlements or we might be doing work on the site that isn’t actually building the building.”
The firm has “no immediate plans” to build data centers speculatively, he added, but even a build-to-suit can require three or four years of lead time. Users are starting their search increasingly early because “they’re so incredibly complex to build,” while
it can be a lengthy process to secure commitments from a utility company.
Langan, the engineering and environmental services firm, also
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