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Voit Real Estate's Todd Holley on the Battery Storage Boom in Southern California
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Date:
13 Mar 2025
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“Power is such a huge focus right now for everyone,” explains Todd Holley, Senior Vice President at Voit Real Estate Services, describing an emerging trend that’s reshaping industrial real estate in Southern California. “Data centers are just sucking up all this power. It’s really a key component for everyone involved in industrial real estate right now.”
Holley details how a Blackstone-backed energy group is leading a charge into battery storage development, with nearly $200 million in escrow across multiple sites. The initiative represents a fascinating convergence of industrial real estate, clean energy, and institutional investment that could serve as a template for markets nationwide.
The Battery Storage Opportunity
The core strategy focuses on three key elements: acquiring strategically located parcels near power substations, installing Tesla battery units, and storing and selling power based on market demands while supporting grid stability. “They buy it on the off and the low and sell it on the high,” Holley explains, noting that the self-contained battery units require minimal infrastructure beyond a connection to the substation.
What makes this trend particularly interesting for real estate professionals is the aggressive acquisition strategy employed by the Blackstone-backed energy group. “The energy group is willing to overpay,” Holley reveals, noting that these buyers are still offering prices from two years ago, even as industrial values have declined in some areas. “If property owners don’t sell to us now, they’ll likely only get about two-thirds of our current offer price in today’s market.”
The initiative is bolstered by both state and federal subsidies, with additional incentives available for developing brownfield sites. The key site requirements for these projects include vacant land ranging from 3 to 15 acres with proximity to substations. While the physical infrastructure needs are minimal compared to traditional industrial development, securing suitable sites requires navigating complex factors including substation access rights, environmental considerations, and local power infrastructure capacity.
The Road Ahead
The battery storage trend exemplifies a broader shift in industrial real estate, where infrastructure needs and clean energy initiatives are creating new opportunities for development and investment. “Power is going to be an issue… especially for manufacturing and data centers. That’s the future,” Holley emphasizes.
As power demands continue to grow and grid stability becomes increasingly critical, similar initiatives are likely to emerge in other markets. The convergence of clean energy initiatives, infrastructure demands, and institutional investment suggests this trend could reshape how the industry approaches industrial site selection and development strategies.
“I’m really spending a lot of my time on that power need,” Holley concludes, “and that’s what I’m really excited about.”
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