Developer Buys $22M Arizona Site for Data Center BetDeveloper Buys $22M Arizona Site for Data Center Bet

(Bloomberg) -- Arizona Land Consulting snapped up 160 acres in the state as it expands its bet on the data center boom. 

The firm closed on the purchase in Buckeye, Arizona, for nearly $22 million earlier this month. The site has the potential for as much as 3.5 million square feet (325,160 square meters) of data centers and is located near a Tract data center project.

Arizona Land Consulting aims to start construction in the next few years, with estimated costs ranging from $1 billion to $5 billion, according to chief executive officer Anita Verma-Lallian. 

The company, established about five years ago, has been building up its real estate portfolio as the gains in artificial intelligence stoke demand for data centers. Verma-Lallian’s company purchased another 600 acres (243 hectares) of land last year to develop data centers. It’s also in the process of buying another 2,000 acres in Phoenix and raising funds from investors for that deal, Verma-Lallian said. 

“We’re seeing a huge increase of investors wanting to get into the space – there’s family offices, high net worth individuals, some private equity firms, a wide spectrum of people that we’re working with right now,” she said.

Major Gains

Her firm has also seized on the ripple effects of the data center boom, making relatively quick gains on land in sales to other data center developers. In 2022, Arizona Land Consulting acquired a nearby site for $40 million. And last year, the firm sold that same parcel to Tract for $136 million, a 240% gain. Tract is now using the site to build one of the largest data center developments of its kind in the country. 

Related:Stargate: OpenAI Eyeing More Data Centers in Texas, Other States

Buckeye is considered a prime area for the properties, according to Verma-Lallian. There are huge swaths of undeveloped land, making it more affordable to buy and then build major data centers. Electricity costs in Arizona are also lower compared with other states, helpful for the energy-intensive sites.