The TV series ‘Landman’ features Billy Bob Thornton as an oil executive scouting vast plains and deep oceans for the raw material that powers modern life. In the realm of data centres and the electricity sector, a new breed of businesspeople, dubbed ‘wildcatters’, has emerged. These players are shaking up the market, accumulating both wealth and resistance. Their objective is to secure land suitable for the essential power supply of hyperscalers and real estate investment firms. This is occurring against the backdrop of a predicted $7 trillion boom in the data centre sector.
Morris Betesh, founder of Arrow Real Estate Advisors, a debt and equity brokerage, comments: “We’ve seen some succeed, others hit a dead end. I call them ‘wildcatters’ because, much like people who bought land, drilled and hoped to find oil, they acquire land with the optimism of being able to transform it into ‘powered land’ with 100 megawatts of capacity.” While most wildcatters are investment entrepreneurs with capital markets experience, the opportunities created by the data centre boom are attracting businesspeople from the most diverse backgrounds, who are attempting to acquire available land to drive the development of this asset class.
Dom Espinosa, Senior Managing Director at Newmark’s Texas Industrial Capital Markets Team, confirms: “Everyone is getting involved, from farmers to institutional fund managers. It is probably the broadest spectrum of people pursuing the same goal – from the technology to the energy sector – that we have ever seen in commercial real estate.” Courtney Hammond, Partner in the Real Estate Group at law firm Vinson & Elkins, noted that a wildcatter often secures an option for land that already has planning permission for a future data centre and either has access to transmission lines or a binding commitment for future connectivity. This attractive package is then presented to the highest bidder.
Seattle-based startup Cloverleaf Infrastructure, led by former Microsoft executive Brian Janous, has raised and invested $300 million to purchase land, enter into contracts with utility companies, and acquire electrical equipment for future data centre use. In March, the New York Times reported that Janous and Cloverleaf sold a 1,900-acre site with 1.3 gigawatts of capacity for $200 million to Vantage Data Centres. This site will host a $15 billion data centre complex for Oracle and OpenAI. Another wildcatter, Pine Line, a local real estate and equipment company, sold 400 acres in Archbald, Pennsylvania, to Archbald Ventures and an unnamed developer, who plans to build a $2.1 billion, 17-million-square-foot data centre campus there.
Carrington Brown, Global Head of Data Centres at Affinius Capital, emphasises: “No one can ignore the current demand in this area. Everyone is trying to figure out how to profit from this demand.” While Northern Virginia and the greater Washington, D.C., area were once the epicentre of data centre development, investment is now spreading nationwide. Nicole Fenton, Partner at HSF Kramer, observes that “one sees sites that are more rural, offer less development, less regulation, and generally cheaper land. Many are trying to secure options on land while the necessary permits are obtained, and everyone hopes to be able to offer ‘powered land’ for sale.”
This concept of ‘powered land’ is ubiquitous in the industry. Betesh explains: “It takes a lot of time and many variables to turn land into ‘powered land’. ‘Powered land’ is essentially ready for vertical development and will attract the attention of large end-users such as Alphabet, Meta, and AWS.” He adds that many entrepreneurs are trying to generate $300 million from a piece of land that might cost $50 million to purchase, which corresponds to the price a hyperscaler might be willing to pay. Curt Holcomb, Vice Chairman at JLL’s Global Data Centre Solutions Practice, highlights that undeveloped agricultural land, which cost $2 per square foot three years ago, is suddenly worth $25 per square foot once these wildcatters secure transmission lines for powering future data centres, as well as the water supply needed for cooling. “Smart people recognised early on that they could significantly increase the value of land,” says Holcomb. “Only those who bring together power capacity, fibre connectivity, and access to water can ultimately realise a successful data centre development.”
However, increasing the value of land is not a simple or inexpensive undertaking. It requires elaborate coordination and collaboration with local utility companies, the construction of transmission lines, avoiding lengthy legal disputes regarding rights of way, and the building of substations and water treatment facilities.
