A conversation between Gordon Lamphere, J.D. of Van Vlissingen and Co. and Britt Burt, Senior Vice President of Industry Research for the power industry at Industrial Info Resources. Transcript edited for clarity.
Britt Burt: The energy associated with supplying these data centers, they’re going to be looking at energy as real estate. And what I mean by that is a property’s value will be defined more by the megawatts or kilowatts available to it rather than location. Location, location, location, that’s what you always hear in the real estate market. But I think it’s going to become more and more power, power, power.
Gordon Lamphere: I’m Gordon Lamphere, and welcome to the Real Finds Podcast, where we have real conversations with key entrepreneurs, activists, and researchers shaping the real estate industry and, as a result, our world. On today’s podcast we’ll be speaking with Britt Burt, Senior Vice President of Industry Research at Industrial Info Resources. Britt has spent nearly four decades tracking the industrial construction and power industries. Today we take a deep dive into the forces driving unprecedented electricity demand across the United States. We cover where data centers are being built and why, the biggest misconceptions around their impact on the grid and water supply, and what smart site selectors are actually looking for before they put a shovel in the ground. Britt also makes a compelling case that the old real estate mantra of location, location, location may be giving way to a new one: power, power, power. If you’re a commercial real estate investor, developer, or anyone trying to understand where the data center boom is headed, today’s episode is well worth a listen. Britt, thank you so much for hopping on today.
Britt Burt: Thank you for having me, Gordon. I appreciate it.
Gordon Lamphere: What got you into the world of electricity and real estate and understanding how we power things?
Britt Burt: I’ve been with Industrial Info Resources for about thirty-eight years now. My background was the industrial construction industry. I joined Industrial Info in 1988 and literally worked my way up through the ranks. I now have the privilege to manage our global research team focused on the power industry, both generation as well as transmission and distribution. Nowadays it’s hard to talk about power without talking about data centers, and vice versa.
Gordon Lamphere: Many of the best folks work up from the bottom and get a broad view of their niches. We can take a broad view and then get into specifics, but what ultimately is driving this rapid demand for power? We’re seeing extreme demand for electrical power in every facet of our business and on the real estate side. What’s primarily driving it?
Britt Burt: There are a number of factors. The main driver is the buildout of data centers, the AI data centers, the big hyperscale data centers being built coast to coast, and this is really happening around the globe as well. That’s factor number one. We’ve had well over a decade of stagnant growth in demand for electricity across the country, and there are other factors: industrial growth, residential demand growth, and commercial. It covers all aspects, but data centers are at the top of the list, certainly.
Gordon Lamphere: One of the biggest things our audience is trying to understand is where data centers are located, because there’s a wide array of secondary and tertiary effects on the real estate market around them. What are you seeing in terms of the site location of data centers in the US, and where are they predominantly being located?
Britt Burt: Historically, the part of the United States with the largest population of data centers is the Virginia, Washington DC area, for obvious reasons; a lot of information is transferred through those portals. But as we see new development, it’s not only Virginia, it’s really widespread. We’re seeing Texas, where I am, with a huge buildout of data centers. Arizona is another area with quite a bit of activity, but it’s really coast to coast. Texas is very business-friendly, so we seem to be attracting a lot of development. We’ve seen it in Louisiana, all up and down the Gulf Coast. It’s pretty widespread now.
Gordon Lamphere: What do you think are the biggest misconceptions about data centers in general, and about the buildout and site location process?
Britt Burt: One of the biggest misconceptions, and there are a few, is that data centers are these giant power-hungry hogs that are going to eat up all our grid electricity and send our prices through the roof. That’s simply not true. We see a number of things happening to keep that in check. More and more developers are looking at developing their own power source, their own site power, what we call behind-the-meter power sources, so they’re supplying their own power for those data centers. In fact, during a recent address, the President mentioned something called the ratepayer protection pledge, a voluntary program encouraging all the major tech companies, Microsoft, Amazon, Google, Meta, the major players, to commit to supplying their own power so they don’t use grid electricity and affect power prices. Another misconception is that they use up all our drinking water because they’re huge water users for cooling. But there have been advancements, closed-loop cooling systems, direct cooling for the chips, technology advancements that have brought those concerns into check and made them less of a concern than they once were.
The behind-the-meter generation solution Britt describes is exactly what Whitaker Irvin Jr. is building on the hydrogen side in Hydrogen, Data Centers, And The End Of Energy Poverty.
Gordon Lamphere: Power demand is probably one of the biggest pushbacks we see from consumers. You mentioned some things that might alleviate those worries. What are those steps data center developers are taking?
Britt Burt: Behind-the-meter power, building their own power source to supply a specific data center, is one. Others are going out to acquire what we call stranded power, which is kind of the holy grail. If there have been industrial facilities that closed or are no longer taking power from the grid and there’s power available, that’s there as well. All the major tech players are signing long-term power purchase agreements with some existing facilities. We’re all familiar with Three Mile Island in Pennsylvania; they’re restarting it. Constellation is going to invest 1.8 billion dollars to restart that plant, and the power is going to a data center. Another example is a big nuclear facility in Iowa called Duane Arnold. They retired Duane Arnold a few years ago and are in the process of getting ready to decommission that site, but they now have a deal with Google to supply power. So those are some of the things that help alleviate the shortage of power for the grid.
Gordon Lamphere: When we’re talking about data centers or just large industrial sites, and we work with some large industrial sites that don’t have quite the same consumption but pretty close to some of the smaller data centers, what’s the first thing you look for in terms of power when you start that process?
Britt Burt: One of the things you want to look at is the power that’s available, and is there stranded power there. Just because there are transmission lines in place and a lot of distribution around, that doesn’t mean the power in the grid is not already spoken for or dedicated. So you want a site that has power available, and contracted power with an interconnect agreement in place is a very favorable situation to be in. You have to have the water for cooling. Most of these data centers for the near term are going to use natural gas as their fuel supply, so you need natural gas availability as well, whether that’s pipelines in place or finding out if a pipeline loop has to be built to a site. Those are some of the things to take into consideration, and that holds true for any type of site, whether it’s a data center or a chemical plant or whatever it may be.
Gordon Lamphere: A lot of folks are looking at relocating data centers, and some we know who were in office and a broad variety of asset classes are now looking at onshoring businesses. They’re making a lot of mistakes, and we see it in our business over and over. What’s the most common mistake you’re seeing with site location these days?
Britt Burt: One of the issues is not understanding the speed to power and the hurdles they have to overcome to get power to that specific site. That can be a wide array of issues. If they do not have an approved interconnect agreement in place, this can take a very long time. Permits to build a building and put up structures may take months, whereas getting an interconnect agreement could take years. There’s a backlog in the interconnect queues, whether it’s PJM where you are or ERCOT where I am. So not understanding the speed to power is one of the biggest mistakes. Another is perhaps not understanding the climate where they want to site these facilities. More and more we’re beginning to see a not-in-my-backyard attitude with data centers, like we’ve seen with other facilities over the years. There are even parts of the country putting moratoriums on developing data centers, because they’re not necessarily informed of what building a data center entails, or familiar with the benefits it brings in tax revenue and jobs. So people make a mistake when they don’t fully understand the climate where they’re trying to place these things.
That interconnect-queue-and-community-climate gauntlet is the site-selection reality we mapped in Inference AI Is Rewriting The Commercial Real Estate Site Selection Playbook and explored on the connectivity side with Bruce Garrison in The AI Real Estate Goldmine Everyone’s Missing.
Gordon Lamphere: When we’re talking about the climate, what do you think the general public gets the most wrong about data centers?
Britt Burt: We talked about a couple, the resources they use like water and power. I think many people believe data centers are just empty warehouses with not a lot of economic potential once the construction period is over, and that’s not necessarily true either. They may not employ as many people as a large factory, but they do employ usually high-paying, high-tech jobs to operate them. So I think that’s another misconception people have.
Gordon Lamphere: One of the biggest misconceptions is that you see projects released in the press, and that doesn’t always translate to an actual building on the ground. When many of our investors are looking to be a secondary or tertiary benefactor of development growth, be it data centers or a large industrial development, what are some of the indicators that actually mean something’s likely to come, versus just speculating on a hope and a dream?
Britt Burt: The first thing I look at, and this is true on the power side too, is whether this is an established company. Do they have a track record of not only proposing a project but carrying it out to fruition and seeing it to completion? That’s the first thing I look at to help me understand if this is real. Second, you have to look at how receptive the community or city is to that data center coming into the area, and if there’s public opposition, how deep it runs and what can be done to overcome it. On the water usage concern, one thing we’re seeing is data center developers and owners coming in and investing in infrastructure for the community, making upgrades to wastewater treatment plants and investing in the community to alleviate some of those fears. We see data centers coming in and upgrading the electrical grid around them and investing money to help that along.
Gordon Lamphere: It’s great to say you’re going to invest or bring in power, but that doesn’t always easily happen. What do you think are the most common choke points preventing data center development, or at least making it very hard?
Britt Burt: Power availability is one. How long is the speed to power, and what needs to happen to accomplish it? Do you have to build a whole new power plant? If it’s a new build, the supply chains are a major concern right now, because the gas turbines to put into a natural gas fired power plant have a backlog on orders; it’s taking anywhere from three to five years to get a turbine delivered to the site. All the major equipment suppliers, Mitsubishi, GE, and the rest, are making upgrades to their production capabilities, but there’s long lead time for equipment. I mentioned the interconnect queues, so that’s another choke point. If you need fuel to the site, here in Texas we have readily available natural gas, so that’s never a problem, but there are parts of the country where pipeline capacity isn’t in place and you have to go through permitting to get pipelines built. And the lead times on equipment and labor are becoming a huge concern, not only for data centers but across the industrial and, I feel pretty safe assuming, the commercial side too, the craft skilled labor we need to build these facilities. How those play out and in what order really depends on the specific site and geographical location.
Gordon Lamphere: Let’s talk about geography in general, because there are a lot of implications for investors locating close to data centers. What do you think are the biggest winners of data center relocation in the United States?
Britt Burt: The important thing to look at is the value tied to power, not necessarily the property or land itself. They’re looking at sites where power is available. They have to take into consideration supply chain and labor resources, the availability of labor to build these facilities, and what hurdles they need to cross on supply chain issues. And the regulatory side is something you always have to take into consideration.
Gordon Lamphere: I’d love to take a dive into some broader questions about real estate. We always love our Final Four. One of my favorite questions: what’s one topic the commercial real estate industry isn’t talking enough about?
Britt Burt: I think maybe the data centers that were built prior to 2020. Many of these facilities were built and designed for racks in the five-to-ten-kilowatt range, and now the large AI data centers, the hyperscalers, are using racks in the fifty-to-hundred-kilowatt range. So these existing facilities are going to need to be modernized, refurbished, or rebuilt. I think that’s probably one of the main ones we’re not talking about.
Gordon Lamphere: I wrote a blog post, I think in 2022, about this, because I thought it was a worry for a lot of commercial real estate investors, and I’ve doubled down and been somewhat of a naysayer on some parts of the data center asset class, not entirely, but some of it. How do you think this plays in? Ultimately some of these buildings can be more technology than real estate. Do you think that’s the factor driving some of the issue, or is it something we’re going to experience across real estate as we become more AI-driven as a society?
Britt Burt: I think as we become more and more AI-driven, if we look a few years, maybe ten years into the future, data centers are going to be readily available and make up more and more of the real estate portfolio to a degree we’re not used to seeing nowadays. I think the energy associated with supplying these data centers, they’re going to be looking at energy as real estate. What I mean is the property’s value will be defined more by the megawatts or kilowatts available to it rather than location. Location, location, location, that’s what you always hear in the real estate market, but I think it’s going to become more and more power, power, power, and infrastructure-related.
Gordon’s 2022 obsolescence thesis, and Britt’s “energy as real estate” framing, are the twin pillars of our deeper analysis in Valuing Chicago Data Centers and Adjacent Properties.
Gordon Lamphere: So you think that’s what’s going to change the most about the real estate industry, or where do you think the biggest changes are going to come?
Britt Burt: I’m not going to pretend for a second to be an expert on the real estate industry, but I think that’s one of the big changes I see on the horizon. My focus is more on the industrial side with power. Of course you have to have real estate to locate those facilities, but I think that’s probably going to be one of the biggest issues going forward.
Gordon Lamphere: We have a number of younger listeners. If you could give one bit of advice at the start of your career to yourself, what would it be?
Britt Burt: Other than to be sure and load up in 1997 on Amazon stock? I mentioned I came up through the industrial and construction world, and that’s not an easy road to go. So I think education is important. I do not have a college degree hanging on my wall. It’s worked out pretty well for me, but it doesn’t always work out that well for everyone who doesn’t have a college education. If I had to do it over, I don’t know that I have regrets or would do anything differently, but I think education is a big piece of it.
Gordon Lamphere: One of the ways we love to educate ourselves is by bringing on men and women in the arena like yourself. Who should be the next guest we bring on?
Britt Burt: That’s a tough one. I would say maybe some of the electric utility people who are developing the power to supply these facilities, because it’s a hot topic nowadays, and the strategy to meet that electricity demand.
Gordon Lamphere: We have one coming on in the next couple of weeks, so that’s a great guest. One final question: if somebody wants to get in contact, what’s the best way?
Britt Burt: To get in contact with me, it’s Britt Burt, and my company is Industrial Info Resources. You can send me an email, my first initial B, last name Burt, so bburt at industrialinfo.com. That’s probably the best way to get in touch.
Gordon Lamphere: Thank you so much for hopping on today, and we have to have you on in the future.
Britt Burt: Thank you very much.
Gordon Lamphere: Thanks again to Britt. We appreciate his insights. If you enjoyed the podcast, please give us a like, a five-star rating, and a review. Your comments, interactions, and subscriptions truly matter and help us continue to get quality guests. You can find us on YouTube, Spotify, or wherever you get your podcasts. I’m Gordon Lamphere with the Real Finds Podcast, and thank you for listening.
Van Vlissingen and Co. has been the Midwest’s oldest commercial real estate brokerage, development, and management firm since 1879, and today is independently ranked the #1 commercial real estate agency in Chicagoland, home to the #1 independently ranked agent, Gordon Lamphere, and the region’s #1 ranked commercial property management team. If you own, manage, or invest in data center, industrial, or energy-adjacent property across Lake County, the North Shore, the Northwest and O’Hare corridors, DuPage and the I-88 corridor, Will County, or southern Wisconsin’s Pleasant Prairie, Kenosha, and Racine markets, contact Van Vlissingen and Co. at 📞 847-634-2300 or 🌐 vvco.com. For a market-wide view of where these dynamics sit today, see our State of the Chicagoland Commercial Real Estate Market for Q2 2026.