Growth Drivers: Transportation and Power

March 11, 2026

At first glance, a number of recent land deals around Greater Phoenix appear to be spec deals in far-flung areas. When you zoom out, the picture becomes clearer: They are an early glimpse at the transportation and power hubs that will support Phoenix’s future. This newsletter generally discusses how economic growth and commercial real estate go hand-in-hand—but today we will shift gears a bit and focus on the role of infrastructure projects and some of the trends that are in their early stages.

Railway Expansion Projects

One word you’re likely to start hearing more frequently in the coming years is intermodal: the use of more than one form of transportation for moving goods. In the case of a landlocked logistics hub such as Phoenix, that means trains, planes, and semi-trucks. “Everything is geared towards strengthening our ability to receive goods and distribute them through the Valley,” says Tommy Moore, Commercial Associate – R.O.I. Properties.

BNSF Railway Park. This project would have a large-scale impact on the Northwest Valley and Arizona as a whole. As proposed, it would entail a $3.2 billion, 4,320-acre facility that features a rail-served intermodal terminal, logistics center, and logistics park integrated with BNSF’s main rail line in Arizona. Although it’s still primarily in the approval and land-acquisition stages, BNSF recently began grading work on a 350-acre section.
Pecos Industrial Rail Access and Train Extension (PIRATE). This Union Pacific Railroad Company project will be located within the Pecos Advanced Manufacturing Zone (PAMZ), right by the Mesa Gateway industrial corridor. “The city of Mesa has streamlined the entitlement process for new development, which has made it attractive compared to other markets in the Valley for industrial development,” Moore says. “There’s no clear timeline on the project, but Union Pacific recently purchased an additional piece of land.” At the end of February, the project cleared an environmental review.
SMARTRail Park. The farthest along of the three, this logistics and manufacturing distribution project in Maricopa expects first occupancy by 2027-2028. Unlike the BNSF and Union Pacific infrastructure projects, there are no plans to integrate with air transport.

An Eye on Energy

First, a little bit of perspective. Most of Arizona’s energy is generated from natural gas (45%), while 27% is nuclear power. The category that has been rapidly expanding, at 13%, is solar, while the remaining 15% is a combination of coal, hydroelectric, and wind. APS, which serves 11 of the 15 counties, has over 10,000 megawatts of capacity, and peak demand in the summer is about 8,600 megawatts. Salt River Project (SRP), which primarily serves Phoenix, has 9,800 megawatts of capacity and peak demand at around 8,400 megawatts.

“It’s important to know how much capacity they have and what their peak demand can look like, because that impacts development of any new projects,” says Jake Vice, Vice President – R.O.I. Properties. “Data centers, advanced manufacturing, and chip plants demand a lot of power—and our capacity is already tight.” In fact, he says, utility providers have had to turn down or delay projects until they have time to increase capacity. According to APS, about 350 megawatts are currently dedicated to data centers—but they would need 19,000 megawatts to accommodate all of the requests they’ve received.

Over the longer haul, the government would prefer a focus on renewable energy where possible, rather than building new coal or natural gas plants. Again, this is where some of the spec land comes into play. A significant portion of land in tertiary markets such as Florence, Tonopah, Wittmann, Casa Grande, and Maricopa’s Harquahala Valley has been committed to solar projects. Many of the properties bought in recent years are in the process of rezoning or entitlement, and companies such as Copia Power continue to buy up additional acreage.

“I would say power capacity is the Field of Dreams,” says Vice. “Build it, and they will come. We’re starting to see some of the data center developers now wanting to get into the market, with the knowledge that power capacity may be approaching on the near horizon. Three years ago, they would not have even wasted their time looking for land.”

View to the Future of Phoenix

The magnitude of these projects, both in transportation logistics and power generation, is significant. Land acquisition, zoning, and entitlements are only the first steps in a long process that has a laundry list of challenges and controversies. Utility providers are trying to reassure homeowners that they won’t bear the brunt of building out the grid and suffer higher electric bills, as are Big Tech companies that signed a “ratepayer protection pledge” on March 4. Potential pressure on the water supply is another concern that needs to be addressed by companies and government entities alike. The expansion of intermodal transport and utilities are both key indicators of growth in the Valley and outlying areas—and the prudent CRE investor will keep a close eye on how and where our infrastructure evolves.