Nobody Is Paying $6 Million an Acre for Dirt

Avison Young has powered land in Northern Virginia above $6 million an acre and unpowered land near $4 million. Altus Group tested 80 verified land deals and found committed utility load to be the strongest predictor of price. On October 9, FERC threw out most of the framework PJM wrote to govern how that load connects.

Avison Young's second-quarter data center report puts land without power in Northern Virginia at roughly $4 million an acre, and powered land at $6 million or better. Houlihan Lokey's October update prices raw ground carrying no committed utility load at under $30,000 an acre. It can be the same soil in the same county under the same zoning. What sits between those two numbers is a utility's willingness to deliver megawatts on a date, and the owner of the parcel has no control over it.

That gap has become the entire land business in these markets. Altus Group pulled 80 verified data center land transactions in August and tested what actually set the price. Committed utility load came out as the strongest predictor of what a site traded for. Parcels tied to 230-kV or 500-kV infrastructure cleared at roughly 2.4 times what otherwise comparable sites on 138-kV and below cleared. Avison Young's working definition of power-ready is electrical infrastructure deliverable inside about 18 months, and interest thins out fast once the energization date slides toward the early 2030s. Pricing in this asset class has collapsed into one question, and Dominion or Oncor answers it rather than your seller.

Look hard at what the premium actually buys, because the track record is unkind. Houlihan Lokey's figure is that 13% of the generation capacity requested between 2000 and 2020 was ever built. More than 750 gigawatts withdrew from interconnection queues during 2025 alone. Median time from request to commercial operation, for plants that reached service in 2025, ran 61 months, against 36 months for the 2015 vintage and 22 months for 2008. Texas has paused new data center interconnections while ERCOT audits something on the order of 474 gigawatts of requests. You are selling a queue position with a fence around it, and most of those positions historically never arrive.

On October 9 the ground moved again. FERC accepted PJM's definition of a large load and its large load registry, then rejected the Interim Resource Adequacy Service framework underneath it, including the interim service that would have allowed a large load to connect without matching new capacity in exchange for accepting curtailment, and the bring-your-own-capacity rules alongside it. The commission's reasoning was jurisdictional: the obligations landed on retail customers, the curtailment order picked among them, and the compensation mechanism looked like a retail rate. Whatever you make of the law, the practical effect in the largest data center market in the country is that the rules for connecting a 300-megawatt load, and for deciding who gets shed when the system is tight, are back on the drafting table. Every contract sitting in a feasibility period in Loudoun County with a power milestone written into it picked up an unpriced variable that morning.

Here is the position, and it will cost me a few listing appointments. An owner whose parcel carries no load letter is not holding powered land and should stop pricing against powered-land comps. The $6.33 million an acre that SDC Twin Creeks paid for 97 acres in Leesburg last November was paid for one specific site with one specific interconnection story behind it. Quoting that number to a landowner in a county with no substation capacity available until 2032 is how a listing sits for eleven months and then trades at raw basis anyway, after the seller has turned down two real offers. The move is to sell the option while the option has a bid.

Structure it the way the Graham, Texas project was structured. Plug Power's site went under contract at $50 million plus up to $26.5 million of additional consideration tied to the final electrical load capacity, against a 164-megawatt reference, on roughly 66 acres, with $6.5 million deposited with Oncor to hold the requested load and a $7.75 million letter of credit posted under the ERCOT Batch Zero agreement. Consideration there is indexed to delivered megawatts, which is the correct shape for a contract whose value depends on a third party's schedule. The buyer's own money sitting at the utility is the only honest evidence that the power work is real. If a developer will not fund the interconnection deposit, that developer is shopping, and your seller's parcel is a free option on his pipeline.

The strongest argument against me is a good one, and I have heard it from sellers I respect: a load-indexed earn-out makes the landowner finance the developer's execution risk and get paid last, while a hyperscaler writing $6 million an acre today pays in full at closing. Correct, and if your parcel has a load letter in hand, take the check and stop reading. For everyone else that check does not exist, and the real choice is between raw basis today and a structure that pays for the power if the power shows up. The earn-out is not charity when it is papered properly. Option payments step up and go hard, each one priced so that walking away still leaves the seller ahead of raw basis. The feasibility period caps at 12 to 18 months with extensions bought in cash rather than granted. The PSA requires evidence on a schedule: the interconnection application number, receipts for utility deposits, the load study when it lands. Assignment gets limited to affiliates with the deposit obligation traveling along. And there is a floor, so the ground gets paid for even if the megawatts never do.

This mechanic is older than data centers. In 28 years of land and commercial work across more than 40 states, the value in a site has repeatedly turned out to live in something a third party controlled, whether the curb cut the state highway department had to approve or the rail spur a Class I had to agree to serve. Power is that same problem with four more zeros attached and a federal rulemaking on top of it. The discipline has not changed. Find out who actually holds the thing that creates the value, get their commitment in writing or price as though you never will, and do not let a seller hand a developer a free option on his own ground.

I would rather argue this with people who actually paper these deals than post it into the feed. That is what the CRE Dealmakers Network is for. Bring a powered-land contract you are working and we will take the option ladder apart line by line.