Research Round-Up: Power, Construction Costs and a Phoenix Industrial Reversal

This week’s research points to three forces reshaping location decisions: rising industrial construction costs, power moving even further up the site-selection checklist, and a remarkable tightening in Phoenix’s biggest warehouse buildings.

Welcome to Research Round-Up, Location Decision’s weekly look at the new research worth knowing if you make — or compete for — corporate location decisions.

Location Decision takeaway: Cheap land only gets you so far. Construction costs — and the labor and materials behind them — are widening the location-cost gap again.

After a period of relatively flat or declining pricing, industrial construction costs are heading higher across the Americas.

Cushman & Wakefield’s new 2026 Americas Industrial Construction Cost Guide finds increases across every project size it tracks. Small projects now average $144 per square foot, up 3.6% year over year; medium projects average $87, up 2.8%; and large projects average $78, up 2.3%.

There are some familiar culprits behind the increase — and some big numbers. Copper prices are up 39% year over year, steel is up 17%, and U.S. construction wages have risen 4.3%. Meanwhile, the Americas industrial construction pipeline has climbed back to roughly 389 million square feet, its highest level since early 2024.

The geographic differences are worth watching, too. Cushman identifies Seattle, Denver and Portland among the most expensive markets for larger projects, while Memphis, Charlotte, Philadelphia, Cleveland and Greenville, S.C., rank among the most affordable for large industrial construction.

Location Decision takeaway: The site-selection checklist is changing. Power isn’t buried under “utilities” anymore.

JLL’s latest research makes an argument that sounds increasingly familiar to anyone following data centers and advanced manufacturing: energy is no longer just an operating expense. It’s a location variable.

The most energy-efficient buildings now cost between 43% and 75% less to operate annually than the least efficient buildings, representing savings of $1.58 to $5.13 per square foot, according to JLL.

But the bigger location story is the pressure on the grid. JLL points to data centers, advanced manufacturing and electric transportation as drivers of a new wave of electricity demand. It argues that efficiency and demand management could become part of the answer to constrained power availability rather than simply a sustainability exercise.

For corporate occupiers, JLL gets even more explicit: power access and reliability should now be factored into site selection and lease negotiations, particularly for energy-intensive operations such as data centers and advanced manufacturing.

Location Decision takeaway: Yesterday’s oversupply can become tomorrow’s site shortage surprisingly fast.

Here’s a market reversal worth noticing.

During Phoenix’s post-pandemic industrial building boom, developers delivered so much large-format warehouse space that direct vacancy among buildings larger than 300,000 square feet reached 32.5% in 2022.

According to new Cushman & Wakefield research, that vacancy rate had fallen to just 5.8% by the second quarter of 2026.

And the supply response has essentially hit the brakes. Phoenix delivered more than 19 million square feet of bulk warehouse space in 2023. Through June of this year? Just 300,000 square feet.

Meanwhile, Cushman counts 34 active tenant requirements totaling 21.5 million square feet chasing only 4.1 million square feet of available bulk warehouse space. Nearly 80% of what is currently under construction is already preleased.

The demand isn’t coming from one sector, either. Third-party logistics, manufacturing and retail users have helped generate an average 11.2 million square feet of annual commitments since 2021.

There’s a useful thread running through all three reports.

Industrial demand is firming. Construction is getting more expensive. Available power is becoming harder — and more important — to secure. And in at least some previously overbuilt markets, the best existing space is tightening quickly.

For companies evaluating their next facility, that makes speed-to-market increasingly inseparable from location cost. The cheapest theoretical site matters a lot less if power, construction capacity or suitable buildings aren’t there when the project needs them.