26MAY

Prime breaks ground on 240 MW Phoenix

2 min read

11:34UTC

Prime Data Centers broke ground on three of five buildings at a 240 MW Phoenix campus on 22 May, with three buildings pre-leased to an undisclosed hyperscaler, showing continued build momentum in Sun Belt markets.

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Key takeaway

Build momentum continues in Sun Belt jurisdictions with cleared planning consent and grid access.

Prime Data Centers broke ground on three of five buildings at a 240 MW campus in Phoenix, Arizona on 22 May, with the three buildings already pre-leased to an undisclosed hyperscaler.⁠¹

The Phoenix start is a Sun Belt data point within the $110.75bn quarterly hyperscaler capex cycle. Pre-leased construction in a cleared-consent jurisdiction shows capital continuing to commit while Virginia's fiscal fight and the moratorium-exposed markets stall elsewhere. The contrast holds the topic's boom-and-backlash tension in a single fortnight: shovels in Arizona, cancellations in Southside Virginia.

Deep Analysis

In plain English

When a data-centre developer breaks ground on buildings that are already leased before a single wall is built, it means a major customer has signed a contract to occupy the space before construction finishes. This is called a pre-leased build, and it is how most large data centres now get financed. Phoenix benefits from Arizona's relatively permissive planning rules, access to large amounts of solar power at competitive prices, and grid-connection timelines of 18-24 months, far shorter than the multi-year queues operators face in Virginia or the PJM region. The 240 MW campus, when complete, will consume as much electricity as a city of roughly 200,000 homes.

What could happen next?

Opportunity
Phoenix, Columbus, and other Sun Belt markets with cleared consent and sub-24-month grid connections are structurally positioned to absorb pipeline redirected from Virginia and moratorium-threatened cities.

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: When Northern Virginia data-centre zoning became contentious in Loudoun County in 2018-2020, hyperscalers accelerated pre-leasing in Columbus, Ohio, which offered cleared planning, competitive AEP Ohio grid access, and incentive packages; Columbus went from a secondary to a tier-one market in three years, a geographic-shift pattern Phoenix is now replicating.

Counter-parallel: Phoenix experienced a prior data-centre build-out wave in 2014-2017 that slowed sharply when Arizona Public Service tightened commercial electricity rates and the city's water authority imposed recycled-water mandates on cooling towers; Phoenix modified the regulatory framework and returned to growth, suggesting the current wave has a more durable regulatory foundation than the first.

Consensus view: Cushman & Wakefield data-centre research director Andrew Schaap has tracked Phoenix as the fastest-growing US data-centre market by net new power capacity added in 2025, driven by Arizona Public Service and Salt River Project offering 18-24-month grid connection windows versus the 5-7 year queues in PJM; Prime's construction start fits a pre-leased absorption rate of roughly 1,200 MW annually in the greater Phoenix market.

Counter-view: Data Center Watch analyst Bill Kleyman has flagged Phoenix's summer cooling load as an underappreciated risk: the metro sits in a heat island where ambient temperatures regularly exceed 48°C in July and August, raising cooling energy use effectiveness (PUE) by 0.15-0.25 above Northern Virginia benchmarks and adding $3-5m per year per 100 MW in incremental cooling costs at current Arizona electricity rates.

Key tension: Whether Phoenix's planning and grid-access advantages outweigh its cooling-energy cost premium relative to Northern Virginia's cluster density is the decision every hyperscaler is making as Virginia's fiscal standoff redirects pipeline.

Sources:Data Center Dynamics

Mentions:Sabey Data Centers →Virginia →Northern Virginia →Arizona →Loudoun County DC cluster →Prime Data Centers →Phoenix →

First Reported In

Update #4 · Grid wins power to switch off data centres

Data Center Dynamics· 26 May 2026

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