New Submarkets Competing to Cash in On Data Center Boom

As data center demand continues to surge, emerging submarkets beyond traditional hubs are competing to attract development and investment. While established clusters like Northern Virginia’s Data Center Alley remain dominant, record land scarcity and robust growth are pushing colocation operators and hyperscale developers to nearby and secondary markets that offer available land and infrastructure options.

Communities seeking data center projects must do more than offer space; they need targeted incentives, streamlined permitting, and industry knowledge to stand out. Prince William County, Virginia, for example, has built a strategic advantage by establishing data-specific zoning, expedited permitting, workforce training initiatives, and tax incentives—helping attract more than $2 billion in data center investment.

Industry leaders note that tenants increasingly evaluate incentives before committing, making aggressive local policies a practical prerequisite for development. Access to reliable power and renewable energy sources is also rising in importance as sustainability goals influence site selection.

However, not all local governments are equipped with the industry expertise needed to compete, and some may miss opportunities without better understanding data center requirements. Despite challenges, communities that prioritize infrastructure, incentives, and long-term commitment can capture a share of the booming data center market and benefit from increased tax revenue and economic activity.