Most data center land transactions are outright purchases. The reason is financing: an operator placing hundreds of millions of dollars of improvements on a site generally wants to own the ground beneath them, and lenders generally prefer it that way.
Standard practice is to secure parcel control first — an option, letter of intent or purchase contract — before committing to utility studies. So the first document you see is almost never a purchase agreement. It is an option. What that is →
When ground leases happen
Where the landowner has leverage:
- Your parcel is essential to an assembly — the hole in the middle
- There is nothing comparable available in a market the developer needs
- The landowner is an institution with a mandate not to sell, such as a university, a tribe or a public entity
Asking for a ground lease when you are one of five workable sites in the county is a reasonable thing to try and a realistic way to end the conversation.
The middle grounds
- Sell part, keep part. Convey the developable core, retain adjoining acreage.
- Installment sale. A tax structure, not a different deal.
- 1031 exchange. Defers gain into other real property, with deadlines that start at closing.
General information, not tax or legal advice.