NTT Data Plans $42M Campus Expansion Amid Rapid Growth of North Texas Data Center Market

NTT Data is planning a $42M expansion of its data center hub in Garland, Texas, the latest in a flurry of activity from industry operators in Dallas-Fort Worth.

The 236K SF building will be the fourth at the 47-acre campus the global information technology firm debuted at 2008 Lookout Drive roughly seven years ago. Construction is slated to begin in September and wrap up in April 2026, according to a permit filed with the state.

“Dallas has always been a key data center market for many of our clients based on its location between East and West coasts,” an NTT Data spokesperson said via email.

"Additionally, the ability to reach a broad user base has always been appealing. It’s been exciting to watch the North Texas market respond to the explosive growth in business — we are glad to be part of these efforts to meet demand.”

News of NTT’s new building comes on the heels of several other major data center announcements over the last week, including the $200M expansion of Compass’ campus in Red Oak and Denver-based Stack Infrastructure’s plan to bring a six-building data center hub to Lancaster.

Centersquare leased 30K SF for its new headquarters in Cypress Waters after two data center firms merged to form the company last month.

The Metroplex has seen exponential data center growth over the past few years, and that trend is expected to continue as operators search for access to power and friendly regulations, said Ali Greenwood, executive director in Cushman & Wakefield's Global Data Center Advisory Group. 

“It’s full speed ahead,” she said. “We haven’t had anybody tell us that Texas or DFW doesn’t check a really great box from a data center development perspective.”

DFW had 4.5M SF of existing data center space as of the end of 2023, only 178K SF of which was available for lease, per Cushman & Wakefield. Another 1.4M SF was in the pipeline, but operators can’t get data centers out of the ground fast enough to meet the swell of demand, Greenwood said. The construction pipeline will bring about 225 megawatts of processing capacity to DFW.

Developers aren’t the only ones struggling to keep up. Utility companies are also under intense pressure to build more substations to support the industry’s massive power requirements. 

“Their resources are limited, and there’s only so many millions of dollars they can spend building substations just to support data centers or data center campuses in a particular pocket,” Greenwood said. “They’re being asked to build tons of them every single day.” 

Concerns around the reliability of Texas’ power system have waned since the grid failure of 2021, though some data center operators inquire about future capacity, Greenwood said. 

Electric Reliability Council of Texas said last month it expects peak power demand on the grid to increase nearly 78% by 2030, the Houston Chronicle reported. This far exceeds the average annual growth of 1% seen over the past two decades and is in large part driven by explosive data center growth, CEO Pablo Vegas said at an ERCOT board meeting.

“There are concerns from everyone, including the grid owners, about the capacity and planning for the long-term,” Greenwood said. “They’re certainly trying to solve it as best as they can.”

Despite those concerns, DFW continues to outperform other regions in terms of data center capacity, Greenwood said. North Texas is also home to millions of people, which is among the top considerations for operators.

“The Texas market has extreme population growth compared to other markets across the country,” she said. “It’s a great place for them to set up their production data centers in order to distribute that data that we as consumers living here are consuming every day.” 

Suburbs like Garland are seeing increased demand, but the bulk of DFW data center activity remains concentrated in South Dallas, mostly due to its adjacency to the fiber-rich Interstate 35 corridor, Greenwood said.

“There is an exceptional amount of data center development occurring in South Dallas,” she said. “That’s because there’s available land there, and there’s heavy availability of utility infrastructure.”

DFW may be poised for even more demand as proposed regulations in Northern Virginia prompt operators to seek greener pastures. More than a dozen separate pieces of legislation that could limit where and how data centers are built and operated have been filed at the state and county levels. 

While the outcome of those bills remains uncertain, the change in public perception toward data centers could push some operators toward DFW, which is known to be a more developer-friendly market with fewer zoning hurdles, Greenwood said.

“As you continue to see government regulations occur, it will absolutely cause some people to shift to markets that don’t have those issues,” she said. 

This is essentially what happened when Dominion Energy fell short of its power commitments in Northern Virginia. Developers redirected their investments toward Atlanta, prompting demand in that market to surge, Greenwood said. 

The Atlanta market is also poised to see a pullback in demand after the state voted to suspend its tax incentive program for data centers. Whether Texas could be the next state to turn on the industry is impossible to predict, though Greenwood said local governments remain favorable toward the asset type, especially when compared to traditional industrial.

“We’re really not seeing across Texas an organized anti-data center effort,” she said. “The municipalities like the taxable value of it … it’s less jobs, but they’re higher-paying jobs, less kids in the schools and trucks on the road.” 

The I-35 and I-45 corridors will remain hotbeds for data center activity in the coming years, but less frequented areas may also see operators come knocking as the state’s minimal regulations and business-friendly policies continue to attract investment, Greenwood said.

“You’re going to continue to see development,” she said. “I don’t see anything stopping it.”