Executive Roundtable: Data Center Site Selection and Market Evolution in a Constrained Environment

Danielle Rossi, Trane: The name of the game is power. Some regions prioritize renewable power more than others, and regional regulations must also be considered. 

There’s no design standardization, and it’s challenging to convince data center operators, energy suppliers, and government decision-makers to come to the table for alignment. 

Customers are significantly diversifying their site locations to accommodate the necessary power requirements. 

In recent months, we have seen a large push to the Deep South with multiple projects in Louisiana and Mississippi. Traditionally, with the hurricane risk to those areas, we did not see many large data center builds. The availability of power, fiber, and land now positions this area as an emerging market. 

There have also been some site considerations in the northern Midwest, as it offers access to power and fiber with manageable costs but with an added focus on heat recovery options.

John Pasta, JLL: In 2025, site selection strategies are all about access to power on the shortest time frame. Favorable regulations, tax incentives, and streamlined permitting processes also play a critical role. 

While established hubs like Northern Virginia and Dallas continue to thrive, emerging markets are gaining momentum. 

Indiana, Louisiana, and Mississippi for example, are becoming a hotspot thanks to its affordable land, access to power, and state-backed incentives, attracting major investments from hyperscalers like Meta, Microsoft, AWS, and Google. 

Previously "pioneering" locations such as West Texas are also drawing major attention from these groups as well. 

Michael Lahoud, Stream Data Centers: Yes, site selection is getting harder. Many good sites have already been absorbed, and it's difficult to know where there is still available capacity and where new load can be served. Utilities are overwhelmed by increasing demand, and interconnection queues are so long and overcrowded that they can’t possibly serve more than a small fraction of the load being requested by developers and end users. One common strategy has been to go where there is still power left, and we’re now seeing hyperscalers expanding beyond Northern Virgina into central/rural Virginia, for example. Some hyperscalers have entered non-traditional data center markets in Indiana or Mississippi where there was available capacity, among other rural areas in the central U.S. 
 
This kind of market will make many developers shy about sharing where they’re headed next, but what Stream can say is that there are certainly still pockets of available grid capacity out there that can and will suit the next AI/hyperscale-capable site. Having a great location strategy team and process makes the haystack easier to sift through and the needle easier to spot, so we’ve spent a lot of time finding the best methodology that is now supporting us well in our development efforts. Going forward, everyone – customers, developers, investors – should expect timelines to be a bit more drawn out as space becomes more difficult to find. 

Ryan Baumann, Rehlko: While data center operators focus on securing locations with diverse power sources, they must also consider power reliability—because without consistent, high-quality power, data centers simply can’t function. Many power grids, especially in the U.S. and Europe, are aging, leading to higher failure rates, voltage fluctuations, and more frequent outages—all major risks for data centers. Additionally, the demand for electricity is surging due to the rapid growth of hyperscale data centers and AI-driven workloads. Regions like Texas and Northern Virginia are already feeling the strain, raising concerns about long-term power availability.

Regions that have not traditionally experienced data center growth, like my home state of Wisconsin, are seeing increased interest from data center companies. Communities are actively working to partner with developers and end users to support the necessary expansion in this sector. It is vital for OEMs, like Rehlko, to collaborate with communities alongside our end-user clients to raise awareness about the critical role data centers play in our daily lives and economy. The resilience, services, and innovations we rely on—often without realizing it—are largely made possible by data centers.

To stay ahead of the challenges surrounding power reliability, many data centers rely on uninterruptible power supplies (UPS) and diesel backup generators. UPS systems provide instant backup power to prevent disruptions, while diesel generators offer long-term reliability—keeping operations running smoothly no matter what happens. Together, they create a layered power resilience strategy, ensuring redundancy, stability, and the ability to meet growing energy demands.

We have partnered with iMasons, a forward-thinking organization that focuses not only on the climate impact of data center growth but also on the social acceptance and integration of these facilities. As we move into the future, improving efficiency and educating the public about the essential functions of data centers is imperative. Their impact extends far beyond social media and autonomous vehicles—they are the lifeblood of hospitals, clinics, medical research, and virtually every aspect of modern life.