The Land Game

The first three issues of this newsletter cycle covered politics, then heat. This week we're going underground, to the dirt itself.

Because while everyone argues about whether to build data centers, the smartest money in the country has already moved past that question. They've been quietly tying up the only resource that actually matters in this industry, and it's not the silicon, the cooling, or the megawatts.

It's the land.

Specifically, the land near the substations.

In Northern Virginia's Loudoun County, industrial parcels are now trading above $4 million per acre. In secondary markets like Salt Lake City, Des Moines, and Reno, land prices are jumping 20-40% year over year. In Hansel Valley, Utah, a 40,000-acre data center campus is hinging on a single county vote that's been postponed twice. And in Texas, where a single tract of farmland can fetch more than the same family's grandfather earned in a lifetime, the number of data centers is forecast to increase tenfold by 2030.

The land game is the real game. And it's almost over before most American developers realize it started.

In 2025, the data center industry quietly invented a new asset class.

It's not real estate in the traditional sense. It's not industrial land. It's not even commercial property in the way most investors understand the term.

It's "powered land", and it's the most valuable acreage in the United States right now.

The definition is simple: a parcel that has either secured utility commitments, sits within walking distance of a high-voltage substation with available capacity, or can deliver megawatts to a tenant within a developer's underwriting timeline. That last part is the kicker. In Northern Virginia, large-load interconnection timelines now stretch up to seven years. A parcel that can deliver power in 18 months is worth multiples of one that can deliver power in 84.

The math is brutal:

And the industry knows it. JLL reports North America data center lease rates have increased 60% since 2020. The five largest U.S. hyperscalers have announced $710 billion in capital expenditures for 2026, enough to support 35 GW of global capacity. Every dollar of that needs land it can build on.

The bottleneck isn't money. The bottleneck is the dirt.

Here's a question almost nobody is asking: what is land near a high-voltage transmission corridor actually worth?

For decades, the answer was simple. Power lines were eyesores. Substations were nuisances. Properties near them sold at discounts. Realtors knew the script: "If you want a clear view, look elsewhere."

That entire valuation framework is now wrong.

A parcel within two miles of a transmission corridor, with a substation that has 200+ MW of available capacity, is now one of the most coveted asset classes in American real estate. Hyperscalers, REITs, and infrastructure funds are paying premiums of 200-500% for parcels with credible power paths. In some cases, the substation is worth more than every other feature of the land combined.

Consider the geography:

The substation, once peripheral to property valuation, is now central to it. A repricing of American land is already underway. Most landowners don't yet realize what they're sitting on.

While communities fight publicly over moratoriums and town councils, a different game is being played quietly, in title offices, county recorder filings, and option agreements that never make the news.

The major players are land banking.

Land banking is the practice of acquiring parcels strategically, not to develop now, but to control the supply chain of digital infrastructure for the next decade. Real estate investment trusts and infrastructure funds are dedicating billions to this strategy. The math works because:

Hyperscaler demand now accounts for over 60% of data center land acquisitions globally.

The four-tier player ecosystem looks roughly like this:

Tier 1 - The Hyperscalers: AWS, Microsoft, Google, Meta, Oracle. They buy directly when they can. They use shell entities and economic development authorities when they want to keep their name out of the news. (Look up "Project Baccara" in Maricopa County, Arizona, a $10 billion data center that was approved this past week, with the actual end user not publicly disclosed.)

Tier 2 - The Infrastructure REITs: Digital Realty, Equinix, CyrusOne, QTS. They acquire portfolios of powered parcels and either develop them speculatively or pre-lease them to hyperscalers. The land is the product.

Tier 3 - The Private Equity Land Flippers: Backed by infrastructure funds and sovereign wealth, these players acquire raw or partially-entitled land, secure entitlements and utility commitments, then flip the paper at a 200-400% markup. Many of them will never put a shovel in the ground. The exit is the entitlement package itself.

Tier 4 - The Speculators: Individual investors, small partnerships, and developers betting on adjacent expansion of known data center corridors. This is where the bubble risk lives. Some will hit. Many won't.

The first three tiers are running a coordinated, capital-rich operation. Most landowners, especially in rural communities, have no idea what their land is actually worth.

This week's most useful piece of writing in this entire industry came from real estate investor Victor Menasce, who published a warning to landowners about what he called "data center land speculators."

His framework, paraphrased and expanded:

The Tell #1: Tiny Option Fee A credible buyer puts real money at risk for control. If the option fee is small relative to the property's value, fully refundable, and tied to a long due diligence period, you're being wholesaled. The buyer isn't planning to close. They're planning to assign the contract to someone else for a markup.

The Tell #2: Long Due Diligence Period Six months is reasonable. Twelve months should make you ask questions. Twenty-four months means the buyer has no real plan and is trying to lock you out of the market while they shop your property to a real buyer.

The Tell #3: No Proof of Funds (Or Weak Proof) A screenshot of a bank account is meaningless. What matters is institutional commitment letters, balance sheets that match the deal scale, reputable lender relationships. If they refuse to show evidence of capacity to perform, walk away.

The Tell #4: They Don't Want to Talk About Power A real data center buyer will spend most of their diligence period working with the local utility on interconnection studies. If your buyer isn't doing that, if they're more interested in title work and survey extensions than substation capacity, they're not actually planning to build anything. They're planning to flip.

The practical standard: The longer the control period, the more non-refundable consideration should be paid. A buyer asking for two years of control with $50,000 down on a $20 million parcel is not a credible buyer. A buyer asking for 18 months with $2 million non-refundable is.

If you own land near a substation, near a fiber route, or in a known data center corridor, you are very likely about to get a phone call. Half the people who call you aren't who they claim to be.

This past month, a project called "Stratos" became Utah's biggest land game.

Backed by the Military Installation Development Authority (MIDA) and investor Kevin O'Leary, the project would convert roughly 40,000 acres of unincorporated land in Hansel Valley, much of it in Box Elder County, into a "hyperscale" data center and energy campus. The proposal includes mixed-use zones, energy and technology zones, and infrastructure subsidies. The developer would prepay the county $5.4 million per year for the first three years, while taking on roads, sewer lines, stormwater, and public utilities at their own cost.

The pitch:

The catch:

This is the new pattern. Land that was effectively worthless three years ago is now anchoring multi-billion-dollar investment proposals. Quasi-governmental entities are stepping in to bypass local control. Local commissioners are caught between residents asking them to slow down and state-level players pushing them to move fast.

The Hansel Valley vote isn't just about a data center. It's about who controls the future of American land use, counties, states, or the developers writing the checks.

Here's the line in the American Farm Bureau Federation's recent market intelligence brief that should stop every rural landowner in their tracks:

Agricultural land sales for data center development are starting to affect land values across entire states.

The reason developers love farmland:

Texas now has 546 active or under-construction data centers. Virginia has 706. Both states exempt data centers from sales tax on hardware, software, cooling systems, and emergency generators. Texas additionally exempts electricity and fuel from sales tax for qualifying facilities.

The result:

Electricity expenditures on U.S. farms are forecast to increase 48%, from $5.75 billion in 2019 to $8.5 billion in 2026, partly due to the same data center demand pushing up power costs everywhere. The farmer ends up paying twice, once in higher land costs, once in higher electricity bills.

The collision between AI infrastructure and American agriculture is just beginning. Most rural communities have no policy framework for it.

Here's the most important shift in how data center land is being acquired in 2026: deals now happen in reverse.

The old model: Find good land. Then secure power.

The new model: Secure power. Then find land near the substation that has the commitment.

This is called "power-first" acquisition. It works like this:

The whole game becomes about relationships with utilities, not realtors.

This is why utility planners, typically obscure technical positions in regional power authorities, are now some of the most influential people in this industry. They control what gets built and what doesn't. They decide which parcels become "powered" and which stay agricultural forever.

If you're trying to position yourself in this market, the conversation isn't with the landowner. It's with the utility.

Every major land deal creates an entire ecosystem of pre-construction services. Most of this work is invisible to the public but enormously profitable for specialists.

Site selection consulting: Firms that match developers with parcels charge $50,000-$500,000 per project depending on scope. The good ones have proprietary databases of parcels, substation capacity maps, and utility relationships.

Title and entitlement work: Specialized law firms that handle data center transactions charge $300-$700 per hour. A typical hyperscale entitlement can run $1-3 million in legal fees alone.

Environmental and geotechnical: Phase 1 ESA work, wetlands surveys, soils testing, archaeological reviews. A single hyperscale parcel can generate $200,000-$1 million in environmental consulting work before a shovel hits dirt.

Survey and mapping: ALTA surveys, topographic maps, utility location, easement identification. Specialty firms with drone capabilities and laser scanning are charging premium rates.

Utility coordination: Engineers who can navigate interconnection studies, transmission upgrades, and substation expansions. There are maybe 50 firms in the entire country that do this well at scale.

Civil engineering: Grading plans, stormwater management, road design. Mid-size civil firms with data center experience are booking 18 months out.

Permitting consultants: People who know how to move projects through county and state agencies. Some of the best ones are former employees of those same agencies.

Real estate brokerage: The big four (CBRE, JLL, Cushman & Wakefield, Newmark) all have dedicated data center practices. So do specialty firms. Commission structures range from 1% to 5% of land value, with hyperscale deals creating individual commissions in the $1-10 million range.

If you're not currently operating in any of these spaces, you should be asking why not.

The political fight from Issue #14 keeps escalating:

Durham, North Carolina passed a 60-day moratorium last Monday. Council member Nate Baker said: "Durham is the first, not the only, of North Carolina's major communities to do this." That last word matters, first. The implication is that the floodgates just opened.

Northampton County, North Carolina approved a 32-month moratorium on May 4 after community activist Belinda Joyner delivered a petition with 300 signatures. Original proposal: 12 months. Final vote: 32 months, driven by commissioners who said publicly they'd been burned before by short moratoriums. Commissioner Keedra Whitaker: "I don't see the point in agreeing to a year that we'll have to go back and extend."

Seattle, Washington announced an emergency moratorium after five proposed data centers requested 369 MW combined from the city grid. The proposed moratorium would last 365 days with a possible six-month extension. Seattle is also considering an ordinance creating a separate electricity rate for large-load customers, meaning data centers would no longer be subsidized by residential ratepayers.

Smithfield, Rhode Island voted to ban data centers in every zoning district in the town. Outright. No data center can be built anywhere in city limits.

Lysander, New York voted last Thursday on a six-month moratorium. More than 1,800 residents signed a petition opposing the proposed project before the vote.

Camden County, Georgia is voting tomorrow (May 12) on a nine-month moratorium. The proposal came after a Florida-based businessman requested rezoning of land in Kingsland for an industrial park designed to accommodate data centers.

Tazewell County, Illinois approved a resolution blocking data center petitions until a new ordinance is drafted.

Twinsburg, Ohio, Camdenton, Missouri, and Lake Township, Ohio all approved new pauses this week.

Bulloch County, Georgia extended its existing moratorium through year-end and announced it's drafting an outright ban, meaning the moratorium becomes permanent.

Pennsylvania local officials are now exploiting a loophole in the state's Municipalities Planning Code. If a township doesn't have "data center" wording in its zoning ordinance, state law allows a 180-day pause to draft one. East Whiteland Township in Chester County started its 180-day clock back in March. Other townships are following.

Ohio voters may decide on a statewide ballot measure to ban data centers requiring 25 MW or more of power. Advocates need 413,488 valid signatures by July 1 to qualify for the November 2026 ballot.

Maine. No override yet. The Mills veto holds, but the legislature is reportedly exploring alternative bills for the next session.

Virginia. Budget standoff continues. May 22 is Spanberger's deadline to act on remaining bills. Senate President Lucas continues to refuse a budget that includes the data center tax exemption.

The Wisconsin poll - 70% of state residents now say the costs of data centers outweigh the benefits, according to the Marquette University Law School Poll.

The Indiana case - still no arrests in the Indianapolis councilman shooting. Investigation continues.

The opposition isn't slowing down. The land game continues regardless.

This Week:

Coming Up:

While public attention focuses on the political fight, moratoriums, lawsuits, town hall meetings, the real action in this industry is happening quietly, in transactions that never make the news.

Land is being consolidated. Powered parcels are being banked. Utility relationships are being secured. Option agreements are being signed.

By the time most communities figure out what they want to do about data centers, the land that matters has already been claimed. Not by hyperscalers directly, they show up later, but by the layer of professionals working between the dirt and the power grid.

The American substation, once a piece of overlooked industrial infrastructure, is now the most important real estate marker in the country. The land within two miles of one is the most valuable acreage most people have never heard about.

If you own that land, you should know what it's worth. If you build on that land, you should know who controls the supply. If you're trying to enter this industry, you should know that the conversation isn't with the developer or the landowner. It's with the utility.

The land game is the real game.

And in 2026, it's almost over before most of America realizes it started.

The DC Pipeline tracks data center construction, policy, and market intelligence across North America. New issues every week.

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