By Joshua Burd
Despite rising energy costs and major capacity shortfalls, New Jersey continues to draw interest as a destination for new data center development.
That’s according to a new report by JLL, which said the state was “quietly becoming a top five market with record demand from financial services and (artificial intelligence) deployments.” The firm pointed to several high-profile data center projects that have been announced in 2025, including the first phase of a massive complex in Vineland by Nebius Group NV, an Amsterdam-based company, and a development in Kenilworth by cloud computing startup CoreWeave.
The report said New Jersey, which has 531 megawatts of inventory and a 4 percent vacancy rate, has some 19 megawatts under construction and 124 megawatts planned. That reflects the unmet need highlighted by Nebius in March when it announced its South Jersey project.
“Our first major data center in the U.S. clearly advances our strategic goal of expanding our footprint in the American market as we continue building Nebius into a leading global AI infrastructure provider,” Arkady Volozh, founder and CEO of Nebius, said at the time. “This site has the potential to host dedicated large-scale instances, and we have considerable flexibility to accelerate our deployment plans as and when we need to.
“With New Jersey, we now have secured expansion capacity to over 400 (megawatt). And we are actively reviewing options to extend this pipeline further as we seek to grow aggressively to multiples of where we are today.”
The JLL report said New Jersey was one of 11 markets nationwide in which data center capacity has more than doubled since 2020. Yet the firm and other industry experts say the state’s strained energy grid is a major barrier to new development, especially amid rising backlash over rising electricity bills.
In the Garden State, JLL said requests for capacity upgrades from PSEG hit record inquiry levels this year. It also said the utility’s lead times range between three and seven years, with a large upgrade pipeline.
Nationally, the report said the average wait time for a grid connection is now four years.
“Power delays remain a significant hurdle in alleviating supply constraints,” JLL wrote. “However, there is a silver lining: this obstacle is also preventing a bubble from forming in the sector.
“Utilities have been increasing the requirements for power requests, including larger deposits and minimum contract payments. These are positive actions that will help remove speculation from the queue and accelerate legitimate projects.”
Still, JLL said New Jersey was “ideal” for data centers tied to so-called edge AI and for the deployment of models that are trained and now ready for use by consumers and businesses. Upstate New York and Pennsylvania, meantime, “are positioned for hyperscale campuses.”
Other recent activity in New Jersey includes Amazon Web Services’ launch of a new so-called Local Zone location at an undisclosed site. Other existing operators, such as Equinix, Digital Realty Trust, QTS and CoreSite, have been linked to expansion or new development plans.
A new wave of data center demand is coming to New Jersey, but supply may be tighter than ever
