For three years running, data centers ranked first among property types in ULI and PwC's Emerging Trends in Real Estate survey. In the 2027 edition, released October 27, they lost that spot, and according to Bisnow's summary of the report, they posted the survey's steepest single-year fall of any asset class. A drop like that can read as a warning that the market is cooling. The details say something different, and for owners and investors the difference matters.
1. Execution risk is the story, not demand
The report pins the slide on execution. That is a useful distinction. Investors are not saying tenants have stopped wanting capacity; they are saying it has become harder to deliver that capacity on time and on budget. ULI and PwC make a related point in the report's broader themes: "Data centers are intensifying competition for resources," and development pipelines are shrinking because of high costs, tight financing and delays.
For an owner, execution risk shows up in familiar places: a utility date that slips, an approval that takes a second round, long-lead equipment that arrives after the shell is ready, or a design that has to change late. None of those risks is new. What has changed is how much of a project's value now depends on getting them right early.
2. Power is the constraint everyone is watching
Of the survey's respondents, 45.3% named power and grid constraints a top disruptor, per Bisnow. The cost side is moving too: the report notes that prices on PJM, the largest U.S. grid, are set to rise more than 60%, which PJM's market monitor attributes to data center demand.
The practical lesson is that power belongs at the front of the schedule, not the middle. Before a site or building is committed, an owner should know what capacity is available, what the utility will require to deliver more, and what the realistic energization date is. In our experience, a building or parcel with meaningful power already in place, or a credible path to it, can be worth more than a better-located site without one. That is a large part of why existing buildings are getting a second look as adaptive reuse candidates.
3. Local opposition is now a schedule and capital risk
The report cites Data Center Watch figures showing that local opposition blocked or delayed nearly $68 billion in projects in the second quarter alone. It also points to New York, where Governor Kathy Hochul ordered a one-year moratorium on large data centers in July, halting about $10 billion in development.
Entitlement risk used to be something a project team managed after the land was secured. It now belongs in site selection and technical due diligence, alongside power and fiber. That means looking at local zoning rules and how they are changing, the history of recent approvals and denials nearby, any pending moratorium proposals, and the community concerns most likely to come up, such as noise, water, generators and setbacks. A site that looks strong on paper can lose a year to a contested approval.
4. Vacancy is still tight
The demand picture has not gone away. Vacancy is below 2%, and Datacenter Hawk research cited in the report shows North American leasing in the first half of 2026 exceeded all of 2025 by nearly 40%.
That combination, tight vacancy alongside harder execution, is what makes the current market difficult to read. Capacity that can be delivered on a dependable schedule is still in high demand. The projects most exposed are the ones whose timelines assume power, approvals and equipment will all arrive as planned.
What the report does not tell you
The Emerging Trends survey measures investor and industry sentiment; it is not a forecast for any one market or building. Bisnow's summary does not break out data center conditions for Chicago, Atlanta or Denver, and conditions vary widely from one utility territory and municipality to the next. Treat the national ranking as a signal of where risk is concentrating, then test it against local facts: the utility's actual capacity, the local approval process, and current lead times for the equipment your project needs.
What owners can do now
- Move power diligence to the start. Confirm available capacity, upgrade requirements and a realistic energization date before committing capital.
- Treat entitlements as part of site selection. Map zoning, recent decisions and community concerns for each candidate site, not just the preferred one.
- Build the schedule from the constraints out. Start with utility timing and long-lead equipment, then work back to design and construction milestones.
- Look at what is already standing. Existing buildings with power, structure and fiber in place can shorten the path to occupancy when the conditions are right.
- Get an independent read. An owner's representative who is not tied to a contractor, broker or vendor can test assumptions before they turn into commitments.
MDI Access helps owners and investors evaluate sites and buildings, test power and schedule assumptions, and manage projects through delivery as an independent, vendor-neutral advisor.
Talk to one of our advisors about your next project
Sources
- Bisnow, "Data Centers Lose The Top Spot, San Francisco Jumps 40 Places: 9 Takeaways From ULI's 2027 Outlook," October 27, 2026: https://www.bisnow.com/news/national/commercial-real-estate/data-centers-lose-the-top-spot-san-francisco-jumps-40-places-9-takeaways-from-uli-s-2027-outlook
- PwC, "Urban Land Institute and PwC report reveals the 2027 real estate trends transforming how we work and where we invest," October 27, 2026: https://www.pwc.com/us/en/about-us/newsroom/press-releases/emerging-trends-in-real-estate-2027.html