What really drives data center construction: People, power, and process
This blog post was authored by 40 Under 40 Class of 2025 alumni Trevor Walker, PE, SE, Vice President, JLL Project and Development Services.
A successful data center project is built long before the foundation is set. Every strong project begins and ends with people, partners, and power. These elements drive timelines, shape trust, and determine whether a facility achieves operational uptime as planned.
Global expansion has raised the stakes. JLL’s 2026 Global Data Center Outlook projects nearly 100 gigawatts of new capacity between 2026 and 2030, about half in the Americas. Total investment could exceed $3 trillion as hyperscale and colocation providers race to secure power and capacity. In some U.S. markets, grid connection waits exceed four years, making disciplined execution as critical as design.
Invest in People
Human capital is the most important variable in data center development. Many developers partner with local electrical consultants, commissioning agents, and inspectors who have strong rapport with authorities. These experts blend national standards with local knowledge and accountability.
A typical 50-megawatt facility takes about 18 months from groundbreaking to energization. A shortage of commissioning specialists can add months. Remote sites face obstacles such as limited infrastructure or harsh weather. Budgeting for experienced professionals prevents cascading delays.
Community credibility pays off. Hiring locally, supporting training programs, and contributing to civic projects builds goodwill, often making the difference between smooth permits and resistance. These relationships can tip utility and entitlement approvals in favor of established developers.
Design for Flexibility
No one can predict what a facility will look like in 2035, AI workloads are pushing rack densities beyond 100 kilowatts and driving demand for advanced cooling. Facilities that start with diesel backup should plan conversion to battery, hydro, or modular nuclear systems as technology and regulations evolve.
Flexibility attracts capital. Hyperscale tenants are more likely to exercise lease purchase options when master plans show scalable paths for renewable integration and future expansion. Contracts should include multiple scenarios (high, middle, low scenarios) with language covering labor rates and material impacts to maintain transparency when scope changes midstream.
Rigid designs often backfire. Locked infrastructure can become obsolete before commissioning. Adaptable assets remain financeable across cycles and can evolve with advancing energy, sustainability, and AI requirements.
Model Potential Volatility
Leading project teams test their assumptions. Running high, mid, and low scenarios for cost, schedule, and scope builds discipline. For example, modeling leverage at 50, 65, and 75 percent shows how interest rate shifts affect returns and covenants. JLL places average build cost at about $11 million per megawatt, or 10 percent higher for liquid-cooled facilities, illustrating how schedule drift quickly becomes a financial event.
Stress‑testing costs and timelines early gives teams control when markets or materials shift unexpectedly. For multi-state portfolios, sensitivity studies are essential because assets can serve as cross-collateral. Standardized reporting templates and leases provide clarity for lenders and continuity for rotating teams.
Practical starting points:
- Model the entire budget in three risk scenarios, including capital structure, construction, procurement, and tenant improvement allowances
- Set escalation triggers for major line items such as steel, transformers, and HVAC equipment and establish thresholds that activate contingency draws or require value engineering.
- Update models monthly, tracking commodity pricing, lead times, labor rates, and utility costs to adjust reserves before overruns become delays
Early Procurement and “Will Serve” Commitments
Power availability is now the pacing item for construction. In Northern Virginia, a delayed interconnection can cost more than $500,000 per month in lost NOI. “Speed to power” has replaced “speed to build.”
Several projects have been derailed when utilities retracted “will serve” commitments after site work began, triggering lender concern, tenant renegotiation, and occasionally abandonment. Transparent documentation and credible load forecasts build trust continuity and reduce late-stage reversals.
Major electrical and mechanical components require 25 to 55 weeks for delivery plus factory or site witness testing. Missed delivery can delay commissioning six months. Ambiguous procurement clauses create insurance gaps. Contracts must clearly define responsibility across payment, shipping, inspection, installation, and commissioning.
Five steps that separate disciplined developers from distressed ones:
- Engage utilities during concept design with phased load projections
- Secure written service commitments before final design approval
- Execute standalone procurement agreements for owner-furnished equipment
- Require factory witness tests for all long-lead items
- Prefund deposits and confirm insurance and storage contingencies
The Takeaway
Effective data center development rests on four fundamentals: credible teams, adaptable plans, disciplined financial modeling, and early control of power and procurement.
The data center will continue to experience relentless growth ahead, but success still comes down to people, process, and precision. Projects that establish trusted local teams, stress-test every assumption, and secure power early stay ahead of market cycles.