- Tract, a Denver-based data center land development firm, paid $136M for a 2.1K-acre site near Phoenix to build a massive data center campus.
- Tract wants to turn the Buckeye site into one of the largest data center complexes in the nation over 15 years, with an expected value of $20B, excluding server infrastructure.
- Data center development is spreading beyond traditional hubs like Northern Virginia and Silicon Valley to secondary markets like Indiana, Idaho, and Kansas.
As reported in WSJ, Tract, a Denver-based startup, is the latest CRE player to cash in on the growing demand for data center real estate. Tract’s move reflects a broader trend as AI and cloud computing fuel a new wave of land speculation focused on building power-hungry data centers.
Deal Details
This week, the company purchased a 2.1K-acre site in Buckeye, AZ, for $136M, marking a major step in its plan to create one of the largest data center complexes in the U.S. over the next 15 years. The site, located near Phoenix, is expected to support $20B worth of data center development.
The company specializes in acquiring raw land, securing zoning and permits, and necessary infrastructure—such as roads, power, and fiber—before selling the prepared land to data center developers or hyperscale data center operators like Amazon, Google, and Microsoft.
Why It Matters
The acquisition signals a shift in land speculation. Just a decade ago, companies typically bought 15- to 20-acre plots for data centers. Now, the demand is for sprawling campuses of 500 to 1K+ acres, reflecting the massive energy needs of modern AI.
According to CBRE, data centers in the U.S. currently provide about 6.7 gigawatts of capacity, with another 4.5 gigawatts under construction.
This rising demand has led developers like Tract to focus solely on data center projects, particularly in secondary markets where available land is more abundant.
Challenges Ahead
With AI and cloud computing continuing to drive demand, data center development shows no signs of slowing anytime soon. Indeed, the Buckeye project is part of Tract’s broader strategy, with over 20K acres of land under ownership or contract.
Despite the growth in data center development, however, many challenges remain. Community opposition, concerns over power consumption, and the need for renewable energy sources are becoming prevalent issues for developers.
Tract is also working closely with Arizona Public Service to ensure adequate power for its massive Buckeye project, but questions about future energy production linger.
