While Virginia continues its dominance in the data center industry, another region is in the process of building more capacity than the commonwealth, according to a recent CBRE report.
The commercial real estate company issued “North America Data Center Trends H1 2026” at the end of the summer, showing Georgia has 2,882 MW of capacity under construction. Northern Virginia is working to add about 2,420.
“Atlanta was once seen as not a major data center market, but because of the last 5 years of tremendous growth, it is now second overall in size,” Gordon Dolven, the company's head of data center research in the Americas, said in a video posted along with the report. “This was predicated on tax incentives, land availability, cost of land, cost of power, and the fiber connectivity built out in the Southeast.”
João Ferreira, acting director of the Center for Economic and Policy Studies at the Weldon Cooper Center for Public Service at the University of Virginia, attributed the commonwealth’s place in the industry to its “close location to [the] federal government and to the Pentagon, and the great internet infrastructure that we have here in Virginia — there are a bunch of different reasons, from historical reasons to tax incentives and economic incentives.”
He also noted that more data centers are located in the commonwealth than in some European countries and said the shift in construction is part of “a natural process” in the industry.
Despite the changing landscape, the CBRE report detailed several recent Northern Virginia deals: Digital Realty’s $3.5 billion investment in Blackstone sites; Amazon’s planned development of 122 acres of property in Loudoun County; and Stack Infrastructure completing the first building at its Stafford County installation, where 19 total buildings are planned.
The increasing size of hyperscale data facilities to support escalating demand and locating in more rural areas is a part of that newfound decentralization, Ferreira said. While Northern Virginia retains its “Data Center Alley” designation, planned sites in the state are shifting south to places like Chesterfield County, where Google was recently cited by the state for sediment runoff during the construction of its Project Peanut Campus.
In addition to Gov. Abigail Spanberger issuing an accountability and transparency framework for data center development in September, state lawmakers next year will consider a handful of bills continued from the 2026 legislative session. The proposals touch on everything from a land preservation tax and utilities’ cost recovery to transparency around the use of water and other natural resources.
State Sen. Russet Perry, a Democrat representing portions of Northern Virginia, also filed a bill that would institute a data center moratorium until July 1, 2027.
Ferreira compared data centers to airports, saying people want access to the resource, but might not want to live near the facilities because of potential effects to property values.
It’s a calculated tradeoff.
“The other thing that we know is that they can pay a lot of local tax revenues, depending on the regulations and permitting regulations of that specific county or area,” Ferreira said, discussing the potential impacts on property values. “Then the local government can spend the money in better schools, better roads and shift that spending to improve the services in the community.”
Ferreira also noted that increased employment connected to data centers usually only holds during the construction phase, given the facilities don’t generally require a large workforce to operate.