Powered Land: How
Time-to-Power Is Repricing
Industrial Real Estate

Industrial land has always been priced on location: freight, labor, markets, taxes. The defining change of this decade is that, for any power-intensive use, the top of the underwriting stack now belongs to a variable that is not a property of the land at all: the documented date on which electric capacity arrives.

Section 01The footnote that became the price

For most of the modern era, utility service sat near the bottom of a site-acquisition checklist, somewhere between title exceptions and soil reports. The assumption that power would arrive when requested was so reliable that the market priced it at zero. Nobody paid extra for a functioning connection process for the same reason nobody paid extra for gravity.

That assumption has now failed for large loads, and the market has responded the way markets respond: by inventing vocabulary. Brokers and investors speak of powered land, meaning parcels with secured or credibly documented electric capacity, and powered shells, meaning buildings whose service is already in place. Listing materials for industrial sites increasingly lead with megawatts and energization dates rather than acreage and clear height. When an industry coins a term, it is because a distinction has started to carry price. This one now carries a great deal.

This paper assembles the public evidence for that repricing from two independent streams: the utilities' own regulatory disclosures, which document the scarcity, and the commercial real estate research desks, which document the market's reaction to it. It then sets out the mechanism by which time converts into price, a documentation ladder for separating real capacity from claimed capacity, and the discipline an owner should apply before paying a premium that now attaches to proof, or before failing to charge one.

Two cautions before the evidence. The numbers below describe data-center markets first, because that is where measurement is best; the repricing does not end there, as Section 05 argues. And a premium that scarcity created is a premium that abundance can remove; Section 06 takes that possibility seriously.

Section 02The scarcity, in the utility's own numbers

Begin with the disclosure that best captures the era. Pacific Gas and Electric Company's second-quarter 2026 earnings presentation, filed with the U.S. Securities and Exchange Commission, reports more than 12 gigawatts of data-center demand in its service pipeline. The same presentation reports 490 megawatts of that pipeline with executed interconnection construction agreements.¹ Simple arithmetic on those two disclosed figures puts claimed demand at roughly twenty-five times executed capacity, in one of the largest service territories in the country.

Read that both ways, honestly. A pipeline figure is an expression of interest, not a contract; some of it is duplicative, speculative, or shopping several territories at once, and a utility has reasons to show investors the larger number. The executed figure, meanwhile, reflects process pace on both sides of the counter, not merely utility delay. But under either reading, the real-estate consequence is identical: the overwhelming majority of announced demand holds no executed instrument, which means the sites that hold one are scarce in a way the market can verify. Scarcity that can be verified is scarcity that can be priced.

The demand behind the congestion is national, not local. Lawrence Berkeley National Laboratory's congressionally mandated assessment estimates that data centers consumed about 176 terawatt-hours in 2023, roughly 4.4 percent of all U.S. electricity, and projects a scenario range of 6.7 to 12 percent of national consumption by 2028.² Wherever within that range reality lands, the direction is sufficient to explain why connection requests have outrun the machinery that processes them in nearly every major market.

Institutions are adapting, and the adaptations themselves reprice land. In July 2025 the California Public Utilities Commission approved an interim framework, Electric Rule 30, to streamline transmission-level connections for large new loads in PG&E territory, with applicants funding the necessary transmission work up front.³ Note what that structure does: it moves connection capital onto the customer's side of the meter. A parcel whose owner has already made that spend, or contractually committed it, carries embedded infrastructure capital that an otherwise identical parcel does not. The premium stops being abstract and becomes a line item.

Section 03What the market's research desks now measure

The second evidence stream is the real estate industry's own published research, and it is worth pausing on who produces it. Brokerage research desks are not disinterested parties; they earn on transaction volume, and their headline findings deserve the same scrutiny as any seller's numbers. They are also the only institutions systematically measuring this market, and their measurements point the same direction as the utilities' regulatory filings, which are authored by different parties under different incentives. Convergence between independent evidence streams is the closest thing market analysis has to proof.

One major North American market survey reports that primary-market data-center vacancy fell to 1.4 percent at year-end 2025, a record low, even as primary-market supply grew 36 percent in a single year; preleasing of capacity under construction ran in the mid-seventy-percent range against a historical norm of forty to fifty percent, and net absorption set a record near 2,500 megawatts.⁴ Tenants are competing for capacity years before it exists, and furious supply growth has not lifted availability off the floor. The same survey reports that grid power for existing projects is largely booked through 2030 in most primary markets, that sites able to deliver power within roughly eighteen to thirty-six months command outsized buyer attention, and that site costs in recent and pending Northern Virginia and Northeast transactions exceeded eight million dollars per acre.⁴ Notice, too, the unit of account: supply, absorption, and construction in that research are all denominated in megawatts, not square feet. The market's own bookkeeping has quietly conceded the thesis.

A second global research house reaches the same structural conclusion from different data: speed to power now leads all site-selection criteria in the sector, ahead of community support, latency, and customer proximity, with the average wait for a grid connection in primary markets exceeding four years.⁵ Its research desk has extended the point beyond data centers, reporting measurable power premiums across property types, in some cases it cites reaching 49 percent, and concluding that energy infrastructure and real estate value are becoming durably interlinked across major property sectors.⁶ That last conclusion is the thesis of this paper, stated by a party with no stake in this paper.

Treat the specific percentages as indicative rather than precise. Premium statistics average across heterogeneous deals, markets, and documentation quality, and no published average tells an owner what a specific site's capacity position is worth. But the direction, the vocabulary, and the convergence across independent sources are no longer in serious dispute.

Section 04The mechanism: how time converts into price

Real estate has always capitalized scarce attributes that are hard to replicate: rail spurs, water rights, deep-water frontage, entitlements. A dated path to power is the newest member of that family, and it behaves most like an entitlement: a bureaucratic artifact, attached to a parcel, that took years of process to obtain and cannot be manufactured quickly at any price. Four mechanisms do the converting.

First, revenue displacement. For a use whose economics depend on being operational by a date, delay defers the entire earnings stream, not a fraction of it. A buyer comparing a powered site against a cheaper unpowered one is not comparing two parcels; it is comparing two start dates, and the value of the earlier one scales with everything the load earns.

Second, option expiry. Some delayed projects are not deferred but lost: the tenant signs elsewhere, the contract window closes, the product cycle moves on. Where delay converts to forfeiture, the powered site is not incrementally better. It is the difference between a project and no project.

Third, the carrying cost of dead land. An entitled, financed, unpowered parcel accrues taxes, interest, and option payments while producing nothing. Every quarter in the queue is a quarter of negative yield, and buyers have learned to subtract it from what they will pay.

Fourth, capital migration. Where connection frameworks require applicants to fund network upgrades up front,³ the connection is itself a capital project on the customer's side. A site where that project is complete, or contractually committed, embeds capital that the comparable does not, and appraisal eventually finds embedded capital.

None of these mechanisms requires sentiment, momentum, or a story about the future. They are arithmetic on dates. The magnitude is site-specific and moment-specific, which is why this paper declines to offer a general multiple; any such number would be false precision. What can be generalized is the instrument that captures the value, and that is documentation.

The documentation ladder

In practice, powered means five different things, and the difference between rungs is most of the value. The gap PG&E's disclosure quantifies, roughly twenty-five parts claimed to one part executed, is the gap between the bottom rungs and the top.¹

Two practitioner notes on the ladder. Assignability is the quiet variable: an executed agreement that cannot transfer with the land, or transfers only with utility consent on uncertain terms, is worth far less than the flyer implies, and the time to discover that is before pricing, not at closing. And rung five is not automatically superior to rung four: existing headroom at the wrong voltage, or headroom whose measured basis is a decade of decline in a legacy operation, may fit the next load worse than a purpose-dated new agreement. The ladder is a diligence sequence, not a ranking.

The scarce commodity is not land, and it is not even power. It is a date the utility will put in writing.

Section 05The spillover into ordinary industrial property

It is tempting for owners outside the data-center sector to read all of this as someone else's gold rush. The evidence says otherwise, for three reasons.

First, competition for capacity is not segregated by industry. A food processor, a cold-storage operator, a foundry, and a compute campus draw from the same substations and the same transmission headroom. When one sector books grid capacity through 2030 in most primary markets,⁴ every other sector's expansion inherits the queue. The research desks already report manufacturing power requirements running at multiples of traditional operations as production lines, process heat, and vehicle fleets electrify.⁶

Second, the repricing is symmetric, and many industrial owners are on the long side of it without knowing. An operating site with documented service and genuine headroom holds an asset that appears on no balance sheet: capacity a counterparty would pay for, either embedded in the property's value at sale or as the anchor of a redevelopment. Owners who have never asked their utility, in writing, what their site's service position actually is are carrying an unpriced asset, and nobody manages what they have not measured.

Third, the expand-or-relocate decision has quietly changed shape. For decades that analysis weighed construction cost against disruption. Today the incumbent site's power position can dominate both sides of the ledger: an existing service agreement with headroom may be worth more than everything a cheaper location offers, and a constrained incumbent site may impose a wait that no operating plan survives. The spreadsheet that ignores time-to-power is not conservative. It is silently assuming the one input that now varies most.

Section 06The honest limits of the powered-land thesis

A thesis this convenient for sellers of powered sites deserves adversarial treatment. Five limits are real.

The premium is cyclical, not a law of nature. Scarcity premiums invite supply, and the institutions whose congestion created the premium are moving to repair it: regulators have opened streamlined connection pathways,³ and the same survey that reports record-low vacancy also reports capacity under construction slightly below the prior year as projects wait on permits and power procurement.⁴ A national queue reform, a demand disappointment, or simply the delivery of the current construction pipeline would narrow the spread. Anyone underwriting powered land at today's premiums should price the scenario in which the queue clears; premiums born of institutional failure die by institutional repair.

Documentation decays. A queue position is a right to be studied; studies age; agreements carry milestones that can be missed. Capacity that was real at signing can be less real at closing. Diligence is a schedule, not an event.

Fit is not fungible. Capacity at the wrong voltage, on the wrong corner of the parcel, or phased on a schedule misaligned with the load's ramp is not the asset the listing implies. Megawatts are necessary; the engineering fit of those megawatts to the specific load is decisive.

Self-supply disciplines the premium in both directions. A buyer who can credibly generate on site has an alternative to paying for grid-dated land, and that alternative caps the rational premium. But self-supply is a family of technologies, not a trump card, and each member carries an honest case both ways. Reciprocating engines offer the lowest capital cost and a deep service ecosystem, and face demanding combustion permitting in strict air districts along with noise and scheduled outages. Turbines and microturbines are compact and reward sites with real thermal demand, and remain permitted combustion equipment with part-load efficiency questions. Fuel cells avoid combustion, which lightens air permitting in several California districts, and run quietly at high electrical efficiency, while carrying higher capital cost, fuel-price exposure, and stack-replacement schedules. Linear generators are modular and fuel-flexible, with the diligence burden shifted to fleet operating history and service depth. Solar with storage buys no fuel and burns nothing, and its capacity factor means continuous loads outrun it unless land area is generous. A site that can permit and host one of these holds a different power position than its service agreement alone implies, in either direction. No single machine wins everywhere, which is precisely why the comparison must be priced per site rather than assumed.

Averages are not appraisals. Published premium statistics blend markets, documentation rungs, and deal structures. The only premium that matters to a specific owner is the one derived from that site's alternatives: the utility's written answer, the credible self-supply paths, flexible and phased service where offered, and the cost of waiting. That number comes from analysis, not from a survey.

Section 07The owner's discipline

The practical response fits in five moves, none of which requires believing any forecast in this paper.

1. Inventory what you hold. Pull the service agreement and the interconnection file for every site you operate. Establish contracted capacity, measured peak, and the delta between them, and ask the utility to confirm the site's service position in writing. Documented headroom is an asset; remembered headroom is a rumor.
2. Date every claim. On any acquisition or lease marketed as powered, demand the instrument: the executed agreement, the study letters, the queue position and its date, the assignability terms. Price the rung on the ladder, never the adjective in the flyer.
3. Price your own deadline. Write down the date by which new load must be served and what a year of slip costs in deferred earnings, forfeited commitments, and carrying cost. That number, set against the premium demanded for a powered alternative, converts an emotional negotiation into arithmetic.
4. Price the alternatives before paying the premium. A powered-land premium is rational only if it beats the priced alternatives for the same load: waiting for standard service, flexible or phased service where offered, self-supply where permittable, or a different site. If no one has priced those paths, the premium is unexamined, and unexamined premiums are how scarcity cycles collect their fees.
5. Re-run the analysis on a calendar. Queue reforms, new utility connection products, and the construction pipeline all move. A power position, like a rate case, is current only as of its date.

The through-line is documentation. The market has started paying for time, and it pays on proof. A site that can prove a date now trades differently from a site that can only promise one, and which side of that line a given property lands on is rarely luck. It is a record of whether anyone did the work.