Tract Capital Races to Control Powered Land as Data Center Demand Explodes
Tract Capital, a four-year-old real estate company, just raised $3.8 billion in junk bonds to build a data center in Nevada backed by Nvidia. Investors submitted $14 billion in orders, a sign of how desperate the market has become for data center infrastructure.
The company owns or controls more than 30,000 acres across Nevada, Arizona, Virginia and other states-an area larger than San Francisco. It's also accumulated water rights and is securing electricity connections. The bet: that "powered land" with energy access will command premium prices as AI infrastructure becomes critical to the U.S. economy.
Tract's strategy is straightforward. Buy land, equip it with power infrastructure, and sell it within five to seven years to hyperscalers and data center developers at a profit. The company aims to secure 22 gigawatts of electricity-enough to power roughly 20 million households.
The Bottleneck: Power
Demand for what Tract is selling is real. Hines Real Estate Holdings estimates 40,000 acres of powered land will be needed to meet data center demand through 2030. New data center construction in the U.S. fell last year for the first time since 2020 as developers faced delays in power procurement.
Electricity has become the constraint. New projects now wait more than four years for a power connection. Goldman Sachs estimates nearly all U.S. power grids will lack critical spare capacity by 2030.
In Arizona, Tract paid $136 million for a 2,000-acre property but faces an unclear path to industrial-scale power. The company is working with Arizona Public Service to secure 1.8 gigawatts-equivalent to two nuclear reactors. Infrastructure costs alone could exceed $100 million.
Experience and Competition
Tract's management team includes Grant van Rooyen, who spent 28 years in digital infrastructure and previously founded Cologix, a data center company that sold a majority stake to Stonepeak Partners in 2017. Graham Williams, president of Tract's land division, was Cologix's chief operating officer.
The company now manages over $6.3 billion across its portfolio. Its land-buying platform can transact on 2,000 acres in a single deal.
Competition is fierce. Real estate giants, startups, and even a Pennsylvania Halloween attraction owner are buying land for data centers. Skeptics question whether Tract has a clear path to electricity and profits, saying the company is one of many speculators waiting in line for power on an increasingly strained grid.
Tight Deadlines Ahead
The Nvidia deal includes strict timelines. The first batch of power is due by October 2027. A full 200 megawatts must be delivered by mid-2028. Nvidia can terminate the lease if 100 megawatts haven't been delivered by March 2031.
Tract's land unit has completed only one exit so far: a sale of Nevada property to its own data center builder. The two units operate independently, according to Williams.
The company has two data center projects underway, according to bond documents.
For real estate professionals, Tract's approach signals a structural shift in how land value is determined. Power access-not location alone-now determines whether property is buildable for data centers. Learn more about AI for Real Estate & Construction to understand how technology is reshaping the industry.
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