Texas Data Center Markets: Why DFW, Austin, Houston & San Antonio Are Leading the Nation

Texas has become ground zero for the next generation of data infrastructure. With its unique mix of land availability, low-cost energy, and pro-business climate, the state is attracting billions in data center development — from hyperscale operators to enterprise and colocation providers.

While Dallas-Fort Worth remains the powerhouse, Austin, Houston, and San Antonio each offer strategic advantages of their own. Here's a market-by-market look at why these cities are leading the data center surge.

🌆 Dallas-Fort Worth: Texas' Unrivaled Data Center Leader

Dallas-Fort Worth (DFW) is the top data center market in Texas — and one of the fastest-growing in the nation.

📊 Fast Facts:

• 386 MW of absorption in 2023 — a record high, nearly 7x 2020 levels (Cushman & Wakefield)

• 605 MW currently under construction, with 87% pre-leased (CBRE)

• Vacancy rate dropped to 3.73%, reflecting intense demand

🔑 Key Drivers:

• Strategic central U.S. location ideal for national traffic distribution

• Competitive energy rates (~$0.06/kWh) and abundant power capacity

• Highly developed fiber and utility infrastructure

• Major investments from Google, AWS, QTS, Meta, and others

DFW’s scale, infrastructure maturity, and developer pipeline position it as the most competitive and investment-ready data center ecosystem in Texas.

🏙️ Austin: The Tech-Savvy Frontier

Austin’s emergence as a tech powerhouse has naturally expanded into the data center space. The city is drawing enterprise users, hyperscale developers, and strategic land plays as its digital infrastructure matures.

📊 Fast Facts:

• Projected to grow from $2.19B in 2024 to $5.0B by 2035 in data center market size

• Under-construction capacity (Austin + San Antonio): 463.5 MW — up 4x from 2023

• Vacancy near record lows at 2.5%

🔑 Key Drivers:

• Strong demand from cloud, AI, and enterprise sectors

• Strategic development near Tesla’s Gigafactory, tech corridors, and power hubs

• Projects like the 600 MW Skybox/Prologis campus are signaling scale potential

Austin combines a future-facing tech economy with a tight data center market, making it a hotbed for near-term opportunity and long-term growth.

🛢️ Houston: Where Energy Meets Digital Infrastructure

Houston is leveraging its legacy as an energy capital to support large-scale digital operations. With increasing investment in data centers, the city is emerging as a top-tier market with distinct advantages.

📊 Fast Facts:

• Vacancy dropped from 19.7% to 14.4% in 2024

• 9 MW of new capacity planned in the next 18 months

• Diverse demand from energy, finance, and healthcare sectors

🔑 Key Drivers:

• Massive power availability and grid expertise

• Business diversification and growing enterprise base

• Existing industrial land well-suited for repurposing

Houston’s ability to support energy-intensive operations, paired with its improving fundamentals, is creating opportunities for savvy developers and users alike.

🌄 San Antonio: Texas’ Emerging Giant

San Antonio is quickly becoming a dark horse in Texas' data center ecosystem. Fueled by land availability and proximity to Austin’s tech engine, it’s attracting serious institutional and hyperscale attention.

📊 Fast Facts:

• Colocation data centers quadrupled in the last 5 years

• Microsoft committed $1.5B+ to development in the region

• Vacancy rates trending down as absorption increases

🔑 Key Drivers:

• Strong land/power combinations in Medina County and Far West San Antonio

• Focus on sustainable water and energy practices

• Close access to Austin without the competition for space

San Antonio offers a compelling blend of scale, infrastructure, and cost efficiency, making it a rising force in the Texas data center race.

🧭 Final Thoughts

Each of Texas’ major metros brings a unique set of strengths to the table:

Market	Core Strength
Dallas-Fort Worth	Unmatched absorption, infrastructure, and national reach
Austin	Tech-driven demand with massive growth potential
Houston	Power-rich and enterprise-diverse
San Antonio	Scalable, cost-effective, and strategically located

As demand for compute, cloud, and AI capacity skyrockets, these Texas markets are poised to remain at the center of the global data center conversation.

Looking for power-ready, off-market land or infrastructure-rich sites in Texas?Contact the Frasier Cole team today — and get access to data center opportunities before they hit the public market.