Surging demand for data centers has created a new opportunity for industrial developers with access to power infrastructure. David Ebrahimzadeh, President and Founder of Corniche Capital, says the most attractive strategy isn’t to build and lease to hyperscalers, but to sell powered land outright. He argues that this approach offers a better risk-adjusted return than competing in the complex, volatile data center leasing market.
Ebrahimzadeh describes his entry into the data center sector as unplanned. After acquiring industrial properties in Belen, New Mexico, and controlling a 2,000-acre site in South Carolina, both with substantial power capacity, he realized that selling these sites to data center operators could be more lucrative than developing them himself. “I’m looking at those situations more from wanting to sell the powered land rather than JV build or lease to the hyperscalers,” he explains.
The main factor driving this opportunity is the shortage of available power on the electrical grid. Ebrahimzadeh notes that the grid cannot support the current pipeline of planned data centers, resulting in multi-year delays before new substations can come online. “There’s not enough power in the grid,” he says. “A lot of these data centers are probably two, three years out before new substations are in place to service them.”
As grid capacity lags demand, data center operators are increasingly forced to seek behind-the-meter power sources, including natural gas, nuclear, hydrogen fuel cells, and other alternatives. Ebrahimzadeh notes that this constraint has driven a surge in demand for sites with immediate or expandable power access. His Belen, New Mexico, property, for example, has the potential for several hundred megawatts of dedicated power, with a possible ramp-up to 600 megawatts. The South Carolina parcel offers similar capacity.
Sites that can deliver large amounts of power quickly, whether through grid connections or on-site generation, now command a premium. “The types of deals that get the most value are ones where you’ve got the shortest path to giving power, whether it’s behind the meter or through the grid, and you’re either on the precipice or have that dedicated power to the site,” Ebrahimzadeh says.
Ebrahimzadeh prefers selling powered land rather than developing and leasing it, reflecting both market risk and opportunity cost. He cites uncertainty about future data center valuations and the evolving competitive landscape among hyperscalers. “I’m not that certain how the market will be two years, three years, five years from now,” he says. Instead of waiting for potential long-term gains, he sees a clear arbitrage opportunity to sell now and reinvest in his core focus: manufacturing and distribution properties.
For developers with limited capital or a primary focus outside data centers, Ebrahimzadeh argues that reinvesting profits from land sales in established industrial sectors is a safer, more predictable strategy. He is currently in discussions with several interested parties, including hyperscalers, but prefers outright sales over joint ventures or long-term leases.
When evaluating land for potential data center use, Ebrahimzadeh prioritizes a short path to dedicated power—whether via grid connections or on-site solutions. He also seeks sites in heavy-industrial zones with minimal community opposition, as local resistance can delay or derail projects.
Community acceptance remains a significant risk factor. Ebrahimzadeh says that while his site selection criteria may seem straightforward—ample, quickly accessible power and a supportive local environment—finding properties that meet these requirements at a reasonable cost is challenging. Developers can secure such sites by paying premium prices, but he emphasizes that for his exit-focused strategy to work, the returns must be substantial. “If my goal is to make arbitrage between my entry point and my exit point, I’m looking for pretty sizable returns to make it worth my while,” he says.
Ebrahimzadeh’s strategy is shaped by his background in industrial real estate and his use of personal capital. Operating without institutional partners gives him the flexibility to pursue short-term opportunities that fit his risk-reward criteria. His involvement in data center land sales began not from a deliberate push into that sector, but from recognizing the value of existing industrial holdings with untapped power capacity.
“I happen to have a building with some land in Belen, New Mexico,” he says, describing how the data center opportunity emerged from assets already in his portfolio.
Whether more industrial developers will adopt Ebrahimzadeh’s sell-rather-than-build approach depends on how quickly the data center market stabilizes and whether the current premium for powered land persists. If grid infrastructure improves and power becomes less scarce, the arbitrage opportunity could narrow. For now, however, developers with access to high-capacity power sites are well positioned to capitalize on this opportunity.
The current environment rewards those who can deliver power quickly and are willing to exit rather than hold. As Ebrahimzadeh’s experience shows, in a market defined by power scarcity and rapid change, selling the land and the power that comes with it may be the most imaginative play.
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