How new data centers can transform rural and suburban economies — Insights for commercial property owners and developers

In addition to powering the digital world, a large-scale data center can shift entire market dynamics. For commercial property owners and developers, these projects can unlock infrastructure improvements, raise surrounding property values, attract a skilled workforce, and fuel demand for complementary developments such as flex space, mixed-use projects, and workforce housing.

In March 2025, Ryan Companies proposed a 482-acre tech/industrial campus in Pine Island, Minnesota — along Highway 52 just north of Rochester — with a program of up to approximately 3 million square feet and potential data center uses. The project is currently undergoing environmental review, and subsequent reports indicate the state has discussed a possible Google data center at the site. While construction has not been formally announced, this single development concept signals a significant shift for commercial property owners and developers across the Upper Midwest.

Data centers, once concentrated in major metropolitan areas, are now expanding into rural and suburban regions. For communities like Pine Island, these facilities can bring more than just server racks and cooling towers — they can generate long-term ripple effects for jobs, infrastructure, and surrounding commercial development.

Why data centers are choosing rural and suburban locations

Generative AI models and large-scale digital services require enormous computing power, and that power must come from somewhere. Rural and suburban sites are becoming attractive for hyperscale operators like Google Cloud, Microsoft Azure, and Amazon Web Services for several reasons:

• Lower land costs compared to urban cores
• Access to high-capacity fiber networks that connect to major internet backbones
• Proximity to renewable energy sources such as wind farms and hydroelectric plants
• Cooler average temperatures, which can help reduce cooling costs for servers
• Lower risk profiles for natural disasters like hurricanes or earthquakes

Minnesota pairs longstanding sales-tax exemptions for qualified data centers with new legislation clarifying cost responsibilities and planning for grid impacts — plus a cooler climate and growing renewable portfolio — making it attractive for large-scale facilities.

The economic impact: Beyond the data center walls

While a single data center may directly employ only a few dozen full-time staff, the indirect and induced benefits can be substantial, often creating new opportunities for surrounding commercial and residential projects.

1. Infrastructure upgrades that unlock development

   To power, cool, and connect a data center, municipalities and utilities often expand power grids, road access, and water systems in the area. These enhancements can make previously underutilized parcels development-ready, reducing site-prep costs and expanding the range of viable project types for nearby landowners.

2. Rising commercial real estate values

   Proximity to upgraded infrastructure and high-value tenants can raise property values, particularly along transportation corridors. In Loudoun County, Virginia, data center property tax contributions now account for nearly half of all commercial property tax revenue, according to JLL — helping fund further community improvements that boost surrounding land values.

3. A stronger customer base through secondary business growth

   For every job inside a data center, about 3–4 additional jobs are created in the local economy. JLL reports that in Virginia, data centers supported about 78,000 total jobs in 2023; in Metro Phoenix, more than $10 billion in investment generated $863 million in state and local tax revenue in a single year. This growing ecosystem of contractors, suppliers, hospitality, and service businesses drives demand for retail, industrial, and office space.

4. Long-term talent attraction that fuels housing and amenities

   Data centers attract skilled professionals in IT, cybersecurity, engineering, and operations — and those workers want places to live, shop, and spend their free time. Developers can position workforce housing, retail, healthcare, and recreation projects to meet these needs and capture steady demand.

Opportunities for commercial property owners and developers

Even if your land isn’t suited for a data center, the arrival of one nearby can open the door to profitable developments — often with improved infrastructure, a stronger tenant base, and new market momentum you can leverage.

1. Capture demand from supporting businesses

   Data centers pull in contractors, suppliers, logistics providers, cloud-service partners, and security firms that need nearby facilities. Developers can target this demand with build-to-suit light industrial, flex space, and tech-ready office environments — often at premium lease rates.

2. Time projects to workforce growth

   For every job inside a data center, multiple jobs emerge in the surrounding economy. That growing workforce creates reliable demand for multifamily housing, service retail, restaurants, and fitness facilities. Developers who plan ahead can meet this demand as soon as it peaks.

3. Leverage upgraded infrastructure

   When municipalities and utilities expand power capacity, water systems, roadways, and fiber networks to support a data center, nearby parcels benefit too. This can reduce site-prep costs, open up previously undevelopable land, and make higher-intensity projects financially viable.

4. Benefit from municipal reinvestment

   Property tax revenues from data centers can be substantial, and in some markets, fund further public improvements. Developers in these areas often see enhanced community amenities, better transit links, and improved public services that make projects more attractive to tenants and buyers.

5. Align with workforce training programs

   Many operators partner with local colleges and trade schools to train future talent. Developers can collaborate with these programs to create innovation hubs, tech campuses, or housing tailored to students and early-career professionals, positioning their properties within a growing talent pipeline.

6. Build goodwill and accelerate approvals

   By engaging with local leaders, supporting community benefit initiatives, and aligning messaging with data center operators, developers can position themselves as partners in growth — which can lead to smoother entitlement processes and stronger public support for new projects.

Related questions about data centers and development

Q: A new data center is going up near my rural property. What does that mean for my land value and development opportunities?

A: Large-scale data centers, like the proposed 3 million square-foot facility in Pine Island, MN, can boost property values, attract supporting businesses, and trigger infrastructure upgrades. Learn how these projects can impact rural economies and how commercial property owners can position themselves to benefit.

Q: I’m a commercial developer in the Upper Midwest. How can I capitalize on the growth of rural and suburban data centers?

A: Hyperscale data centers don’t just power the internet — they power local economies. Developers can create flex space, mixed-use projects, and workforce housing to complement data center growth. Success often depends on aligning projects with municipal planning and utility expansion.

Q: What kind of economic impact do new data centers have on small towns?

A: From upgraded roads and power grids to job creation and secondary business growth, data centers can transform local economies. The Pine Island project illustrates how infrastructure investment can lead to long-term community benefits.

How DBS Group can help

As a design-build construction manager with deep experience in commercial and industrial projects across Minnesota, Iowa, and Wisconsin, DBS Group helps property owners identify, design, and deliver projects that maximize market opportunity. Whether you’re planning a build-to-suit development or repositioning an existing property, we bring the expertise to align your vision with market trends and economic growth patterns.