Why Power Capacity Has Become a Primary Factor in Warehouse Site Selection

By Sam Laird

Industrial real estate users have always evaluated warehouse space on location, cost, functionality and access to labor. Power capacity is now joining clear height and loading docks as a primary filter in that evaluation—and in some markets, it has become a deciding factor in site selection.

Link Logistics market officers across the country describe the same pattern: customers asking earlier and more specifically about power than they used to, building requirements rising well above what warehouses were specified for a decade ago, and available capacity becoming a genuine constraint in markets where demand has accelerated fastest. 

The trend is driven by two primary factors: Manufacturing users need heavy power for equipment and production lines; and distribution tenants increasingly need power for automation systems, HVAC and electric vehicle charging infrastructure. From manufacturing hubs in the Midwest to technology corridors and desert markets in California and the Southwest, the same question is increasingly central to industrial leasing conversations: How much power does this building have, and how much more can it get?

Why Are Industrial Tenants Prioritizing Power Capacity?

Power has moved up the list of tenant priorities because the operations inside warehouses have changed. Warehouse automation—conveyor systems, robotics, automated storage and retrieval—requires substantially more electrical capacity than a conventional distribution operation. Manufacturing users, particularly in advanced sectors like semiconductors, EV components and defense technology, have power requirements that can run many times higher than traditional warehouse operations. And in markets with hot climates, full HVAC conditioning—increasingly expected rather than optional—adds another significant layer of power demand on top of operational requirements.

The result for many warehouse tenants is that power has shifted from an assumed utility to a constrained resource that tenants must factor into their site selection from the outset. It is no longer a detail to be resolved after a location is chosen.

Which Markets Are Seeing Power Capacity Drive Site Selection?

The markets where this trend shows up most clearly have little in common geographically or economically—a sign that the underlying forces are national rather than local. Manufacturing markets, technology corridors and desert markets driven by climate are all converging on the same constraint, for different proximate reasons.

Cincinnati

Cincinnati offers a clear articulation of power as a defining trend in tenant requirements. The market's manufacturing heritage and growing automation adoption are converging to create sustained demand for heavy power capacity.

"Cincinnati's industrial real estate market is seeing growing demand for heavy power capacity, driven by two converging forces: the resurgence of U.S. manufacturing and the rise of warehouse automation," says Peter Brennan, vice president and Cincinnati market officer for Link Logistics. "Cincinnati's strong manufacturing heritage makes it particularly well-positioned for this trend, as the region already has the workforce and infrastructure base that power-intensive users need."

Brennan notes that "virtually every conversation about a new building now includes questions about power—how much is available, how quickly it can be increased and what the ceiling is." Many tenants don't need heavy power today, but they want confidence that the infrastructure can support it in the future.

Read Link Logistics' full Cincinnati market overview.

Greensboro

Greensboro illustrates how quickly power requirements have escalated in a market with deep manufacturing roots. The Piedmont Triad's industrial heritage means power infrastructure has always factored into the market, but the scale of demand has shifted meaningfully in a short period of time.

"Power is the dominant trend," says Britten Mathews, senior vice president and Greensboro market officer for Link Logistics. "Greensboro has historically been a manufacturing market, so power infrastructure has always been part of the equation here—but demand has accelerated significantly in the past six to nine months." Tenants are consistently asking for a baseline requirement of 3,000 amps or more, with some advanced manufacturing users seeking to scale significantly higher.

The timeline matters as much as the volume. Sourcing additional power from the grid can take 10 to 12 months in some cases, which means buildings with existing capacity—or the infrastructure to upgrade efficiently—carry a competitive advantage. Toyota's nearly $14 billion battery manufacturing investment in nearby Liberty has reinforced the trend, drawing suppliers and supporting businesses that bring their own power-intensive requirements into the broader Triad region.

Read Link Logistics' full Greensboro market overview.

South Florida

South Florida's power story reflects a market whose tenant base has changed. Manufacturing users and tenants with manufacturing components to their operations have become more common, and their power needs have outpaced what the market's existing building stock was designed to deliver.

"The number-one request across the board is for heavy power," says Merritt Etner, senior vice president and South Florida market officer for Link Logistics. Warehouses historically delivered with three-phase power around 400 amps now routinely need 600 to 800 amps for tenants requiring HVAC and manufacturing equipment. Manufacturing tenants are typically requesting more than 1,200 amps—sometimes for a single 50,000-square-foot space, an amount that used to be sufficient to serve entire multi-tenant buildings.

The power requirement compounds with HVAC demand. Climate-controlled warehouse space in South Florida was historically reserved for cold storage operations; it is now broadly requested across the market, and every degree of conditioning adds to the power load a building must support.

Read Link Logistics' full South Florida market overview.

Phoenix

Phoenix demonstrates how power constraints can emerge even in a market built for growth. The market's expansion—driven substantially by TSMC's semiconductor campus and the broader high-tech manufacturing ecosystem it has attracted—has put power capacity in increasingly short supply.

"Power capacity has become a commodity and is increasingly difficult to secure," says Matt Duplantis, senior vice president and Phoenix market officer for Link Logistics. Companies requiring higher power loads are finding that availability, not cost, is the binding constraint on their site selection. The dynamic is reinforced by climate: Phoenix's increasingly hot summers have pushed many tenants toward full HVAC-conditioned space rather than evaporative cooling, and full HVAC requires substantially more power than the systems it is replacing.

Link Logistics has responded with targeted development. The company has a project underway in Phoenix specifically designed with higher power capacity—an example, Duplantis says, of the kind of targeted capability that matters in a market where power availability has become constrained.

Read Link Logistics' full Phoenix market overview.

Bay Area

The San Francisco Bay Area shows power capacity constraining growth in one of the country's most capital-rich industrial markets. The same AI and advanced manufacturing boom driving extraordinary demand for industrial space is also straining the electrical infrastructure needed to support it.

"Power capacity has become a major constraint for both data centers and advanced manufacturers in the Bay Area," says Graeme Coyle, senior vice president and Bay Area market officer for Link Logistics. "Companies operating data centers or AI manufacturing facilities need substantial power—often 50 to 100+ megawatts—and local utilities are struggling to deliver the necessary capacity."

The constraint has become significant enough to reshape real estate decisions directly. Buildings with existing power capacity or proximity to substations command premiums, and tenants increasingly need to confirm power availability before committing to a facility rather than assuming it will be available.

Read Link Logistics' full Bay Area market overview.

Las Vegas

Las Vegas illustrates how power and climate intersect to reshape tenant requirements. Local regulations now prohibit the evaporative cooling systems once common in the market's warehouses, making full HVAC the standard for new development—and full HVAC, in turn, raises the power threshold every building must meet.

"Power is relatively affordable in Nevada compared to other states, but available capacity has become a genuine constraint in parts of the market," says Matt Duplantis, who also oversees the Las Vegas market for Link Logistics. Some tenants are now asking for as much as 8,000 amps, a figure that would have been almost unimaginable for a conventional warehouse a decade ago. Data center development in the market is competing for the same land and power infrastructure that industrial tenants need, adding further pressure on available capacity.

Read Link Logistics' full Las Vegas market overview.

Salt Lake City

Salt Lake City's power story is tied directly to its broader flight to quality. As tenants gravitate toward modern, high-spec warehouse space, power capacity has become one of the defining features separating that product from older inventory.

"ESFR fire suppression systems and heavy power capacity are increasingly standard requirements, driven by growing demand for automation-ready facilities among both distribution and manufacturing users," says Ryan Simpson, vice president and Salt Lake City market officer for Link Logistics. The vast majority of recent net absorption in the market has occurred in new supply—a pattern that reflects tenants' preference for buildings that meet rising power and automation expectations rather than older facilities that don't.

Read Link Logistics' full Salt Lake City market overview.

What Does Rising Power Demand Mean for Businesses Evaluating Industrial Space?

What's notable is how little these markets have in common otherwise. A Midwest manufacturing hub, a Silicon Valley tech corridor and a growing desert market are all converging on the same constraint, for different proximate reasons but the same underlying cause: Industrial buildings are being asked to support far more electrical load than they were designed for a decade ago.

For companies evaluating warehouse space, power capacity now deserves the same upfront diligence as location, clear height, labor availability and lease cost.

The most immediate implication is timing. In markets where utility upgrades can take the better part of a year or longer, businesses that wait until late in their site selection process to confirm power availability risk losing months of runway on a project. Confirming power capacity—and the timeline for any necessary upgrades—should happen early rather than as a final-stage formality.

The second implication is forward planning. Many companies don't need heavy power today but may in the future as they adopt automation, add manufacturing components or expand HVAC requirements. Markets like Cincinnati and Greensboro show that landlords and tenants alike are increasingly building in power headroom rather than sizing strictly to current need, because the cost and time of adding capacity later is far higher than building it in from the start.

It's worth noting that power capacity is not a primary consideration for every industrial tenant. Conventional distribution operations with standard throughput requirements—consumer goods, general merchandise, regional fulfillment—typically operate well within the power specifications of most modern warehouse buildings. The power story is most acute for advanced manufacturers, automation-heavy distribution operations and tenants in hot climates where full HVAC conditioning is a functional requirement. For small businesses and others that don't fall into those categories, power remains a utility rather than a constraint.

Finally, power availability is becoming a genuine differentiator between markets, not just between buildings. Markets that can deliver reliable, scalable power—particularly those with existing manufacturing infrastructure or favorable utility environments—are positioned to capture demand from companies for whom power has become a binding constraint elsewhere. For businesses with power-intensive operations, that factor may carry as much weight as traditional considerations like population density, labor access or transportation infrastructure.

Link Logistics owns and operates warehouse and industrial space across 40+ North American markets. Explore available warehouse and distribution space to learn more about industrial real estate opportunities that can support power-intensive operations.