AI data center land buying hits $6B as power premiums rise
Utilities want certainty from data center builders, while data center builders need committed power, a 'chicken-and-egg' dilemma with a big effect on data center site selection.
U.S. purchases of land for future data centers reached about $6 billion in the first half of 2026, up 79% from a year earlier, according to Avison Young.
The spending reflects demand for large AI campuses, as hyperscalers, neocloud providers, energy-first developers and investors compete to secure sites for new computing capacity, according to the Q2 2026 Data Center Market report.
For data-center operators, the stakes are both operational and financial. Delayed power can push back capacity delivery, complicate customer commitments and leave expensive buildings waiting to enter service.
"The biggest thing right now is speed to power," John Andril, manager of market intelligence at Avison Young, told TechTarget in an interview.
In Northern Virginia, entitled land without power can sell for roughly $4 million an acre, compared with at least $6 million an acre for powered land, Andril said. Entitlements, infrastructure and other site characteristics also affect prices, so the comparison does not isolate the value of electricity alone.
"The premium is increasingly payment for uncertainty removed, not just for megawatts nearby," said Neil Osnato, an industry analyst who has examined data center land transactions.
Committed power drives land value
An Altus Group analysis of 80 verified data center land transactions in August found committed utility load was the strongest predictor of land pricing.
If you don't have power until the early to mid-2030s, you're probably not going to get a lot of interest.
John Andril, Manager of market intelligence, Avison Young
Sites associated with 230-kilovolt or 500-kV infrastructure traded at roughly 2.4 times the pricing of sites associated with 138-kV or lower infrastructure, according to the analysis.
Transmission access can reduce the upgrades required to serve a project. In some cases, existing infrastructure can also shorten the regulatory process and save about a year, Andril said. However, proximity to a transmission line doesn't guarantee that a utility can deliver the required capacity on schedule.
"If you don't have power until the early to mid-2030s, you're probably not going to get a lot of interest," Andril said.
Andril said a genuinely power-ready property generally needs electrical infrastructure deliverable within about 18 months, roughly matching the time needed to prepare a building for its initial load. Developers also need clarity on the equipment required for a substation and who will fund and build it.
For campus planning, developers generally use about 0.5 to 1 acre per megawatt as a rule of thumb, Andril said, although land-constrained markets can support higher densities. A large project, therefore, requires both enough land and a credible plan for delivering its electricity.
A Texas deal puts a value on power
A transaction involving Plug Power and Stream Data Centers illustrates how power capacity can affect a project's economics.
Plug agreed to sell its Graham, Texas, project to Stream for $50 million, with up to $26.5 million in additional consideration tied to the electrical load capacity ultimately established for the project. The agreement used a 164-megawatt (MW) reference capacity.
Plug had an interconnection request with Oncor and had deposited $6.5 million with the utility to secure a requested 164 MW of load. It also posted a $7.75 million letter of credit under the ERCOT Batch Zero agreement. The project includes about 66 acres, development rights and grid-interconnection assets.
The transaction was later restructured. Stream acquired high-voltage electrical infrastructure for $40 million in August, while the land and remaining interconnection assets remained subject to closing conditions.
The original agreement shouldn't be described as a completed $76.5 million land sale. Its significance is that additional consideration depended on the capacity ultimately established, putting a price on the uncertainty surrounding the project's power supply.
Northern Virginia shows the stakes
Loudoun County records show SDC Twin Creeks Parent LLC, a data center developer, paid $615.05 million for 97.15 acres in November 2025, or about $6.33 million an acre.
The property is part of the Twin Creeks data center development in Leesburg, Va. Dominion Energy separately paid $45 million for about 14 acres associated with the development.
The transactions don't isolate electricity's contribution to the land prices. Entitlements, development rights, site assembly and market conditions also influence valuations. They illustrate the scale of investment in data center sites in one of the country's most competitive markets.
Andril said the effect can be pronounced in lower-cost markets, too. Land that might sell for roughly $10,000 an acre without a viable data center power path can become worth six figures per acre after developers establish the infrastructure and utility relationships needed for a large project.
Utilities want proof developers are serious
Utilities face a planning problem of their own. They must prepare for large new loads without spending billions of dollars on projects that never materialize. Developers, meanwhile, want confidence in power delivery before committing substantial capital to a site.
Andril described the problem as a "chicken-and-egg" situation.
Letters of credit, take-or-pay agreements and stricter interconnection-queue requirements can help utilities separate serious projects from speculative requests. Andril said established developers and end users can support those measures because removing speculative projects makes legitimate demand easier to evaluate.
Onsite generation offers another option. Developers can use it to support initial operations while waiting for utility infrastructure, Andril said. Whether that approach makes financial sense depends on generation costs and the project's economics.
For data center operators, those factors belong in site selection and project underwriting from the start. A land deal can look attractive on price and location, yet fail to meet the business case if the power needed to serve customers arrives too late.
Shane Snider is a senior news writer at TechTarget, covering AI infrastructure, hyperscale data centers, cloud platforms, and the power and energy systems driving modern compute expansion. You can reach Shane at [email protected] or on LinkedIn.
