Colorado-Real-Estate-Journal_499210

Page 24 — Office & Industrial Quarterly — December 2025 www.crej.com INDUSTRIAL A rtificial intelligence may feel invisible in our daily lives, but the energy behind it is anything but. According to Aterio, there are currently over 585 data centers in the U.S. currently under construction, with Meta making up 26 of those. Fun fact: Even a single ChatGPT query uses energy roughly equivalent to running a 60-watt light bulb for 10-30 seconds. Multiply that by millions of users worldwide, and the aggregate energy demand is already comparable to a small U.S. city. Across the Front Range, conver- sations around data centers have accelerated dramatically in the past 12-24 months. We are fielding more inquiries from developers and users trying to understand whether Colorado can support power-heavy developments, particularly coloca- tion providers, enterprise users and AI and cloud-driven groups. The interest is strong, but the con- straints are real. Colorado has an opportunity in front of it, but also a narrow window to align infrastruc- ture with demand. n Demand is real and growing. The most common users approaching us today are colocation providers and enterprise/corporate users. Coloca- tion providers operate data centers where businesses lease racks, cages, or suites to house servers and IT equipment, a cost and time efficient alternative to building their own facilities. These users represent a steady demand and typically do not require the 100-300 megawatts that hyperscalers and AI companies request. Yet even moderate users are ultimately limited by the availability of rapidly deliver- able power. While there is a clear national surge driven by AI, cloud, and high- performance com- puting, Colorado is capturing only a portion of that wave. Unlike Phoenix or Dallas mar- kets where industrial developers now compete directly with hyper- scale data centers for large tracts, Colorado’s industrial base contin- ues to expand without interrup- tion. Most industrial tenants don’t require extraordinary infrastructure and can operate comfortably within the current utility environment. Data center users need power we often cannot deliver in the same timeline neighboring states can. n What data center users prioritize in Colorado. The availability of truly power-served sites in Colorado is extremely limited. Many industrial parcels make sense from a square footage or entitlement standpoint, but only a small number have the underlying infrastructure required for large-scale data centers. Most sites across the Front Range could realistically support only a 25-30 MW facility, not the 100-300 MW campuses AI users are seeking. In Colorado Springs specifically, we have one identified site in El Paso County that could support a 600- MW campus, but it’s important to note that this site does not have 600 MW available today. Colorado Springs Utilities cannot simply “switch on” that amount of power. To achieve it, the operator would need to pro- cure energy from a third-party source, likely a combination of natural gas and solar farms. And while the region could build the wind and solar farms necessary to supple- ment a campus of that size, the energy would still need to be stored, transmitted, and stepped down before reaching the facility – an enormously expensive undertaking requiring new substations, trans- mission lines, and battery storage at levels that do not currently exist. The result is very long lead times and likely too expensive. n The power reality on the ground. When clients ask about power, the first step is a conversation with Colorado Springs Utilities or a trusted local professional to deter- mine what the site can realistically support. This step often reveals sites that look viable on paper but lack the substations, feeders, or committed MW needed for modern data centers. Utilities are working to expand capacity, but large-load infrastructure projects can take years to complete, particularly for sites that require new substations or transmission upgrades. To put this into perspective, the Colorado Springs Utilities system serves the city and surround- ing areas with a peak demand of roughly 900 MW, while total annual energy consumption for the service area is about 4.8 million megawatt- hours, averaging around 13,000 MWh per day. A single large data center campus requiring 100-300 MW of power would be equivalent to roughly 10%-30% of the city’s peak demand, or enough to power tens of thousands of households. This highlights both the opportu- nity and the challenge: Colorado Springs’ grid can support significant new load, but delivering it quickly and reliably requires careful plan- ning and upgraded infrastructure. n Why other markets are more com- petitive right now. Colorado is los- ing opportunities because other markets can deliver power faster, at lower cost, and with infrastruc- ture that’s ready to go. States such as Virginia, Texas, Arizona and Utah offer advantages that Colo- rado currently struggles to match: aggressive utility planning and faster large-scale delivery timelines, pre-entitled megasites and land ready for build-out, streamlined interconnection and permitting for data-center scale loads, competi- tive incentive packages tailored for hyperscale users, and lower land and development costs. In contrast, the cost of doing Data centers: Power challenges define moment Randy Dowis Principal, NAI Highland Megan Mechikoff Broker associate, NAI Highland Please see Dowis, Page 32