Shift From Location To Power In Commercial Real Estate With Britt Burt – RFP 92

The New Site Selection Calculus: Why Power Is Replacing Location as the Defining Variable in Commercial Real Estate

For decades, the core logic of commercial real estate was geography. Location determined value, absorption, and long-term viability. That logic is being rewritten, and the force doing the rewriting is electricity.

In episode 92 of The Real Finds Podcast, Gordon Lamphere sits down with Britt Burt, a senior analyst at Industrial Info Resources with nearly four decades covering the power industry. Britt tracks generation, transmission, distribution, and the infrastructure supporting large-scale industrial development across North America. His vantage point sits at the intersection of energy markets and real estate, and right now, that intersection is one of the most consequential in commercial property.

The conversation covers what is actually driving data center demand, how site selection works in practice, which markets are winning and why, and what investors and developers need to understand before underwriting any deal tied to digital infrastructure.

Power Demand Is the Story Behind the Story

The data center boom gets a lot of coverage, but the conversation often focuses on square footage, lease rates, or geographic clusters. Britt reframes the question. The more important variable is not where the buildings are going. It is where the power is, how much of it is available, and how quickly a developer can access it.

Artificial intelligence workloads have fundamentally changed the power requirements for data centers. Traditional colocation facilities operated at relatively modest densities. AI infrastructure, particularly the GPU clusters supporting training and inference at scale, requires significantly more power per square foot. That shift has moved electrical capacity from a secondary consideration to the primary constraint shaping where development can actually happen.

The result is that access to power, interconnection agreements, and transmission infrastructure are now driving site selection decisions in ways that traditional real estate criteria simply cannot override.

Where Development Is Going and Why

Certain markets continue to attract the majority of data center investment, and Britt walks through the underlying reasons. Virginia remains the dominant market globally, with a concentration of fiber, carriers, and existing infrastructure that is difficult to replicate. Texas benefits from a deregulated grid structure that gives developers more flexibility in how they source and contract for power. Arizona has drawn significant activity partly because of land availability, favorable permitting environments, and proximity to Western demand centers. The Gulf Coast is increasingly relevant as industrial power infrastructure in that corridor becomes an asset for large energy users.

What these markets share is not just available land or low taxes. They offer real, near-term access to electrical capacity. That is the differentiator. Markets without it are watching projects flow elsewhere regardless of other incentives.

Speed to Power as a Site Selection Metric

One of the most useful concepts Britt introduces is what he calls speed to power. Traditional site selection models weight permitting timelines, entitlement risk, construction costs, and labor availability heavily. Those factors still matter, but they are secondary to a more fundamental question: how long will it take to get power to the site, and at what cost?

Interconnection queues at major utilities have grown dramatically. In many markets, a developer who secures a site today may be waiting three to five years or longer before the grid can actually deliver the load they need. That wait time is not a permitting problem. It is a transmission and grid infrastructure problem, and it is often outside the developer’s control entirely.

Understanding where a project sits in the interconnection queue, what upgrade costs are assigned to that project, and what the realistic delivery timeline looks like is now foundational diligence for any data center investment.

Behind-the-Meter Power and the Changing Economics of Development

One of the most significant structural shifts Britt discusses is the rise of behind-the-meter power generation. Rather than relying entirely on grid-delivered electricity, some of the largest data center developers are now building their own generation capacity on-site. This includes natural gas, combined heat and power systems, and increasingly, dedicated renewable generation paired with storage.

Behind-the-meter strategies allow developers to reduce dependence on congested transmission infrastructure and accelerate their timelines. They also change the economics of the underlying real estate. A site that can support behind-the-meter generation has a different value profile than one that cannot, and that distinction is beginning to show up in how sophisticated buyers and developers evaluate land and industrial properties.

For investors, this is worth tracking carefully. It means that certain industrial parcels with access to natural gas infrastructure, adequate acreage for generation equipment, and favorable utility interconnection terms carry attributes that were not in the traditional underwriting model.

Stranded Power and the Risk of Phantom Projects

Not every announced data center gets built. Britt is direct about this. A significant share of projects that generate press releases and municipal economic impact studies never reach construction. Understanding the difference between a viable project and a phantom project is one of the most important skills in this market right now.

Stranded power is a related concept worth understanding. In some cases, a site may have a legacy interconnection agreement or existing utility infrastructure that was built for an industrial user that has since shut down or reduced operations. Those agreements can sometimes be transferred or repurposed, and they represent a form of hidden value that does not always show up in traditional real estate appraisals.

The signals of a credible project include a signed interconnection agreement, a clear power delivery timeline, a specific equipment procurement plan, and evidence that the developer has worked through the supply chain constraints that are currently slowing construction. Turbine lead times, transformer availability, labor capacity, and pipeline access for gas-fired generation are all real bottlenecks. Projects without clear answers to these questions carry more execution risk than their announced timelines suggest.

Common Mistakes in Data Center Underwriting

Britt identifies several patterns he sees repeatedly from investors and site selectors who are newer to this space.

The first is treating power availability as a binary. Markets are often described as having power or not having it, but the reality is more nuanced. Available capacity at what voltage? Deliverable on what timeline? At what cost, including the share of upgrade costs assigned to the requesting customer? These are the questions that differentiate a workable site from one that looks attractive until the utility study comes back.

The second is underestimating the timeline for interconnection. Developers who have worked in markets with streamlined permitting sometimes assume that if they can get a building approved, they can get power delivered on a similar schedule. That assumption is wrong in many markets right now, and it has caused significant capital to get deployed into projects that are sitting idle while waiting on grid infrastructure.

The third is failing to account for modernization costs when evaluating existing data center assets. Older facilities built for traditional compute workloads are often not well-suited for high-density AI workloads without substantial capital investment. Power density, cooling infrastructure, and floor load capacity all need to be evaluated against the requirements of modern GPU-intensive deployments.

Public Misconceptions Around Data Centers

Britt addresses several concerns that frequently come up in public discourse around data center development. Water consumption is one of the most common. Many data centers use evaporative cooling systems that require significant water intake, and this has generated local opposition in some markets. Britt explains how developers are responding, including through dry cooling technologies and more sophisticated water management strategies, though the economics of those alternatives vary meaningfully by climate and scale.

Grid strain is another recurring concern. The argument is that large-scale data center growth will push power prices up or compromise grid reliability for residential and commercial customers. The reality is more complicated. Large industrial customers often provide grid services that improve stability, and the investment flowing into generation and transmission to support data centers creates infrastructure that benefits other users over time. That does not mean there are no tradeoffs, but the public conversation on this is frequently less informed than the technical reality warrants.

The Second and Third Order Effects on Real Estate Value

The broader implication of this conversation for real estate investors is worth sitting with. If power access is becoming a primary determinant of where industrial and data center development concentrates, then properties and markets with strong electrical infrastructure may appreciate in ways that traditional real estate analysis does not yet fully capture.

Industrial corridors with proximity to high-voltage transmission, sites with existing utility easements or generation infrastructure, and markets where utility investment is actively expanding all have attributes that are increasingly relevant. At the same time, markets with constrained grid capacity and long interconnection queues face real headwinds for new industrial development regardless of how their other fundamentals look.

This is not a future trend. It is happening now, and the developers and investors who understand the power side of the equation have a meaningful informational advantage over those who do not.

About Britt Burt

Britt Burt is a senior analyst at Industrial Info Resources, where he has spent nearly four decades covering the power industry, including generation, transmission, distribution, and the infrastructure supporting large-scale industrial development. He can be reached at bburt@industrialinfo.com.

About The Real Finds Podcast

Hosted by Gordon Lamphere, The Real Finds Podcast features conversations with operators, investors, developers, policy thinkers, and business leaders shaping commercial real estate and the built environment. The show focuses on practical insights, market trends, and the ideas changing how people invest, build, and use space. Subscribe on your preferred platform and follow along for upcoming episodes.