Option to purchase agreements for data center land

The short answer

An option to purchase agreement is a contract in which you, the owner, sell a buyer time. For a fee, you give the buyer the exclusive right to buy your land at an agreed price within a set period. The buyer may buy or walk away. You may not: while the option runs, you cannot sell the land to anyone else. Data center buyers use options because the things that decide whether a site works, such as power, rezoning and engineering studies, take months or years to prove, and few buyers want to own a field before they know it can be served.

Options are where data center land deals start, and many of them never finish. In our table of 51 reported data center land deals, 13 were signed or approved but not reported closed, and 3 of those had a closing confirmed by the source we fetched. The oldest had been waiting 8 years. The most striking open row is in Hill County, Texas, where a developer holds contracts on 800 acres at about $100,000 an acre, roughly 36 times the $2,790 that USDA reports as the 2026 average for Texas cropland. A price like that is real only when the deal closes.

Below: how an option works, what owners have been paid for one, extensions, conditions, access, lapse, recording, red flags, and a checklist for your own attorney. It is a plain-language guide, not legal, tax or investment advice. Every option, easement, lease or sale contract should be reviewed by your own attorney, and the tax side by your own CPA.

What an option is, and what it is not

A one-way promise

An option is a one-sided contract. The owner (the “optionor”) promises to sell on stated terms if the buyer (the “optionee”) decides to buy before a deadline. The buyer pays for that promise with an option fee and promises nothing else. In the words of a KX News report on three option agreements a data center developer signed with landowners near Mandan, North Dakota, in March, the agreements gave the company the exclusive right to buy for one year, could be extended for up to three more years, and did not obligate the company to buy. When the city council of Richland, Washington approved an option on 275 acres for a company planning five data center buildings, the local business journal made the same point in plain words: an option agreement does not mean the buyer has bought the land.

That asymmetry is the whole deal. You are selling the buyer the right to decide later, and you are taking your land off the market while it decides.

Four documents that look alike

Landowners are often handed documents with similar names that do very different things. Roger McEowen, a Washburn University law professor writing for the Kansas State University agricultural economics extension, puts the first question every owner should ask simply: is this an option or a binding purchase contract?

• An option to purchase. The buyer may buy, and you must sell if it does. If it does not, the option ends.
• A purchase and sale agreement with contingencies. Both sides are bound, but the buyer can cancel if listed conditions fail, such as rezoning, financing or a utility study. In practice a contract with broad contingencies and a long due-diligence period behaves much like an option, and data center buyers often use one. The Hill County contracts in our table are described in the developer’s own lawsuit as contracts that grant it “the right to buy” four contiguous parcels.
• A right of first refusal. You keep the right to sell to anyone, but before you do, the holder may match the offer. It does not let the holder force a sale. Maryland’s recording statute treats it as a kind of option, which tells you how seriously it can bind land.
• An option to lease, or to lease with a right to purchase. The buyer may sign a ground lease later, sometimes with a right to buy the land outright. A 2026 SEC filing by Comstock Holding Companies lists 18 agreements titled “Option to Lease Land with Right to Purchase (Paid-Up)” with landowners in Noble and Pawnee counties, Oklahoma, several of them over 1,000 acres, assembled for data center campus development. The agreements themselves are not attached to the filing, so the terms behind that label are not published; with your own document, read the terms rather than the title.

A ground lease has different economics again; our powered shell and powered land guide explains when developers buy, lease or build.

Why data center buyers ask for options

A data center site is worth what its power is worth. A field near a substation is worth farm prices until a utility agrees to serve a large load there, and it may be worth many times that afterwards. A buyer cannot know which it is buying until studies are done, and studies take time and money. An option lets the buyer spend that money while risking only the fee.

The Hill County case shows how long and how expensive the proving can be. According to the developer’s federal lawsuit, as reported by KWTX, RCM Hill signed four contracts with four landowners over 16 months, spent nearly $1 million on due diligence, and planned a 1,235 MW campus. ERCOT, the Texas grid operator, approved its steady-state and stability studies on May 12, 2026, which made the project eligible as a “Studied Load.” To stay in ERCOT’s “Batch Zero” review of large loads, the project needed local approval attestations forwarded by July 24, 2026, and a capacity deposit of $50,000 per MW, or $61,750,000. None of that money was the landowners’ money, and none of it was certain to be spent. That is the situation an option is designed for.

The same pattern appears in public documents elsewhere:

• In 2017, Xcel Energy gave Jet Stream LLC, an affiliate of Google’s Honeycrisp Power, an option on 315.2 acres beside its Sherco power plant in Becker, Minnesota. The power side of the project, including dedicated wind farm contracts, moved through the state commission separately.
• Richland’s option buyer, Atlas Agro, depends on a power line the Bonneville Power Administration plans to build, for both its data center and its fertilizer plant.
• Plug Power’s 2026 sale of a Graham, Texas site to Stream US Data Centers paid $50 million at closing, with up to $26.5 million more depending on the load capacity confirmed in the final interconnection agreement with the Texas utility.

In each case the buyer pays for certainty about power before it pays for land. Expect any serious buyer to ask for time; the question is how much, at what price and on whose terms. Our site selection guide covers what buyers check meanwhile.

What our deal table shows about deals that have not closed

Our land-deal table records publicly reported data center land transactions, each with a link to the record or report it comes from. Most rows are closed sales. 13 are not: they are options, approved purchase agreements and conditional sales whose closing the source did not confirm. They make up 25% of the table and cover 2,295 acres, 6 of them in the United States.

Three things stand out.

Signed is not closed, sometimes for years. The Dulles Western Lands sale was approved by the Metropolitan Washington Airports Authority board in September 2018, and the press release we cite gives no closing date; the sale had to respect current zoning and airport-compatible use. A secondary source lists it as completed, but we could not verify that, so the row stays open. The Dauphin County golf course, 228 acres sold by a county authority to a Provident Realty company for $45.6 million, had a tentative closing date of December 31, 2027, more than two years after the board approved the agreement, and the authority’s chair said many conditions still had to be met.

Prices on open deals are agreed, not yet paid. The 5 open US rows for land without bundled grid assets carry a median of $100,000 an acre, against $301,896 for the closed US land-only sales on our land price page. The Hill County contracts, at about $100,000 an acre, are roughly 14 times the $7,100 appraisal the developer itself cited, according to KWTX. Until the buyer closes, the owners have a promise of that price and whatever fees the contracts pay.

A third party can stall a signed deal. Hill County commissioners passed a moratorium on new data center, battery storage and power generation projects by a 3–2 vote on May 12, 2026, the same day ERCOT approved the developer’s studies. The developer sued in federal court, and on June 4 the commissioners court rescinded the moratorium unanimously. The landowners were not parties to that fight, but their sale depended on it.

None of this makes an open option a bad deal. It means the fee paid up front, and the terms that govern the waiting, deserve as much attention as the headline price.

The option fee and extensions

What real documents show

Option fees are rarely published, which is one reason owners have little to compare against. Four public documents give real numbers.

Xcel Energy and Google’s affiliate, Becker, Minnesota. Xcel’s filing with the North Dakota Public Service Commission describes the April 28, 2017 option: in exchange for an escrow deposit of $100,000, Xcel granted Jet Stream an exclusive option to buy 315.2 acres at $20,000 an acre, $6,304,000 in total, a price set by appraisal. By 2021 the option ran until January 1, 2024, with $100,000 placed in escrow for each additional year, credited against the price at closing. If exercised, the sale had to close within 30 days, and the buyer would take the land as-is, where-is, with all faults.

South Dublin County Council and Amazon, Ireland. The council’s 2018 report on land at Grange Castle South set an option on 6.55 acres at €500,000 an acre, linked to the Irish consumer price index. The annual option fee was 1% of the price in year one, €32,750, and 2% in year two, €65,500. Any extension, and its terms, was at the council’s sole and absolute discretion, and the option could not be transferred except as part of a permitted transfer.

City of Richland, Washington. The council approved a nonrefundable $250,000 option fee on 275 acres, against a purchase price of just under $24 million.

A buyer’s own limits, from an SEC filing. The Comstock filing sets the terms its joint venture will accept for land options assembled for data center campuses in Oklahoma. An “Approved Option Agreement” must charge option fees of no more than $200 an acre for the initial term and no more than $250 an acre for each extension term, run at least three years with at least two three-year extensions (a maximum term of at least nine years), and carry an option price of no more than $15,000 an acre unless the partners agree otherwise. The same document defines an “Exit Value Threshold” as a sale at $150,000 an acre or more.

A worked example from the filing

Take a 400-acre farm optioned on the Comstock terms. At the caps, the owner would receive up to $80,000 for a first term of three years or more, and up to $100,000 for each three-year extension, so up to $280,000 over nine years if both extensions are taken. The purchase price would be capped at $6,000,000. The buyer’s exit threshold for the same land is $60,000,000. That is our arithmetic on the filing’s own numbers, and it is not a statement about any particular farm, but it shows why the buyer wants nine years at a fixed price: the gap between the option price and the price at which it plans to sell is ten to one.

You may still decide a fixed price is worth the certainty, but know the buyer’s model before you fix a price for most of a decade.

Terms that change the real value of the fee

• Refundable or nonrefundable. A fee that the buyer can claw back during due diligence is a deposit, not an option fee. Richland’s was expressly nonrefundable. McEowen recommends escalating, nonrefundable option payments.
• Applicable or extra. Xcel’s extension payments were credited against the purchase price, so they were an advance on the price rather than extra money for the wait. That is common and not unfair, but compare offers on the same basis.
• Escalation. South Dublin doubled the fee in the second year and linked the price to inflation. A price fixed in year one and paid in year seven is worth less in real terms than its face value.
• Who may extend. Many forms let the buyer extend by paying the next fee. South Dublin kept extensions in the seller’s hands. An extension at the buyer’s sole option is a longer option; price it as one.

Conditions precedent: zoning, power and approvals

What a condition precedent is

A condition precedent is something that must happen before a party has to perform. In a data center option or contract, the usual conditions are rezoning or a special use permit, a utility’s confirmation that it can serve the load, environmental and title reviews, and sometimes a tax abatement or an economic development agreement. If a condition fails, the buyer can usually walk away, and often get some or all of its money back.

How public documents handle them

• Planning permission. South Dublin took a deposit of 10% of the price on signing, refundable if the development did not receive full planning permission or other conditions were not satisfied. The buyer could also rescind if the final permission carried conditions it considered onerous. That second clause matters: it lets a buyer walk away even after it wins approval, if the approval has strings it dislikes.
• Power. Plug Power’s buyer will pay more only if the final interconnection agreement confirms the load. In Becker, Xcel’s supply agreements with Google’s affiliate depended on a “notice to proceed” by a deadline; the affiliate missed it, and Xcel terminated the agreements on December 8, 2022. Before that, MPR News reported, the project had been on hold for a couple of years and Google had not yet bought the land.
• Local approvals. The Hill County project needed local approval attestations for ERCOT, which is why a county moratorium put the land contracts at risk.
• A deadline that slipped. In Butte, Montana, Sabey Data Centers reached a buy-sell agreement with the county for 606 acres; NBC Montana reported that its closing date had been pushed back to August 11, and that another company, REC Silicon, planned to use a right of first refusal over 627 acres of the same business park, at $2,000 an acre, a clause Sabey had only recently learned of.

Proving that a site can get power is its own process, often ending in a utility letter that the load can be served; we will cover it in a separate guide.

Questions to ask about each condition

• Who decides that it has failed? A condition the buyer can declare failed in its sole discretion is close to no condition at all.
• Is there a deadline to apply? A buyer that holds your land for two years without filing for rezoning is using the option as a free hold. Ask for dates by which applications must be filed.
• What must you sign? Rezoning applications usually need the owner’s signature. Expect a clause requiring you to cooperate, and ask that it be limited to signing, at no cost to you.
• What happens to the zoning if the buyer walks? If your farm is rezoned for industrial use and the buyer leaves, your tax assessment, your neighbours and your future plans may all change. Ask your attorney how your county handles that, and whether the contract should require the buyer to reverse the change at your request.
• What happens to the money? List which payments stay with you when each condition fails.

Due-diligence access to your land

Before it buys, a data center developer will want to walk, survey, drill and sample your land. South Dublin’s contract gave the buyer a licence to enter for due diligence and site analysis, listing geotechnical studies, soils testing, water analysis, site borings and environmental assessments, and required insurance and an indemnity during the building period. Those are normal. What matters is who pays for the damage and how the farm keeps running.

McEowen’s example is precise: a developer asks for a three-year option with unrestricted access for soil borings and environmental testing, and unless the agreement allocates responsibility for crop damage, tile repair, gates, fencing and restoration, the farmer may suffer substantial losses even if the deal never closes. He recommends that the contract expressly authorize planting, harvesting, grazing, drainage maintenance, conservation work and participation in USDA programs until closing.

An access clause worth signing usually covers:

• notice before each entry, and named people or contractors;
• the type of work allowed, with anything beyond surveys and borings needing your consent;
• payment for crop loss at a stated rate, and repair of tile, fences, gates and roads;
• restoration of the surface within a set time, whether or not the buyer closes;
• insurance naming you as an additional insured, and an indemnity for injury and damage;
• copies of reports, especially environmental ones, if the buyer walks away;
• the right to keep farming, leasing for hunting, and enrolling in farm programs until closing.

Ask also for the reports if testing finds a problem: a buyer that leaves without sharing them can leave you worse informed than before.

If the option lapses, or the buyer walks

The Becker story

The land beside the Sherco plant in Becker shows nearly every way an option can end.

Xcel optioned 315.2 acres to Google’s affiliate in 2017 at $20,000 an acre. Earlier in 2022 the land had still not been bought, MPR News reported, and in December 2022 Xcel terminated its agreements with the affiliate after it missed its notice-to-proceed deadline. By September 2022, Xcel had already told the Minnesota commission that it held an option to sell 348 acres in Becker to Elk River Technologies, a company incorporated that May. According to Industrial Info Resources, Xcel sold that parcel to Elk River Technologies for $7.7 million in April 2024 without competitive bidding, Elk River turned out to be a subsidiary of Black & Veatch, which had done consulting at the plant, and about seven months later Elk River sold the land to Amazon for $73.5 million, nearly ten times Xcel’s price. Amazon later dropped its Becker plans.

Three lessons for owners:

1. An option can run for years and end with no sale. Whether the owner keeps anything then depends on whether the fee was nonrefundable. Xcel’s filing describes the payments as escrow deposits to be credited against the price at closing, and it does not say what would happen to them if the option was never exercised.
2. The buyer may not be the end user. The company that bought under the second option was a newly formed entity, and the data center buyer appeared only after closing.
3. A price fixed at signing does not move when the land’s value does. Xcel’s price was set by appraisal, and the land’s value as a data center site was captured by someone else.

What should happen when an option ends

When an option expires unexercised, or the buyer terminates it, you should be left with clean title, the nonrefundable fees, the reports the contract promised, and restored land. The piece owners most often forget is the public record. If a memorandum of option was recorded, the county record still shows an option until something says it has ended. Ask that the contract require the buyer to sign and deliver a recordable release or termination within a short period, and allow you to record an affidavit of termination if it does not.

Some states clear expired options from the record by statute. California’s Civil Code section 884.010, for example, provides that a recorded option expires of record if no conveyance, contract or other instrument giving notice of exercise or extending the option is recorded within six months after the expiration date stated in the recorded instrument, or, where no date can be ascertained, within six months after the option was recorded. Many states have no such rule, so a stale memorandum can sit in the records and worry a future buyer or lender.

Recording a memorandum of option

A buyer that holds an option will almost always want it on the public record, and it has a good reason. In Texas, Property Code section 13.001 makes an unrecorded conveyance of an interest in real property void against a later purchaser for valuable consideration without notice, though it still binds the parties themselves and their heirs. If you sold the land to someone else during the option, an unrecorded option holder could lose to that purchaser. Recording protects the buyer against you.

Few buyers want the whole contract, with its price, in the county records, so the parties record a short memorandum instead. Maryland’s statute spells out what one must contain: the parties’ names, any addresses stated in the option, a reference to the option and its date, a description of the property, the kind of right created, the start and end dates of the term if stated, the longest extension period or the date to which it may be extended, and the dates by which extensions can be exercised. Every party to the option must sign it.

In Hallam, Nebraska, KOLN reported in August 2026 that landowners had signed “Memorandum of Purchase Agreements,” which the station described as options, on more than 1,500 acres with the same developer active near Mandan. Neighbours often first learn that land is under option this way.

For an owner, the points to settle are:

• the memorandum states the final expiration date, including all extensions, so anyone reading the record can see when it ends;
• the price stays out of it unless you want it public;
• the contract obliges the buyer to release the memorandum when the option ends, as above;
• you see the exact wording before it is recorded, and it matches the contract.

Assignment: who ends up buying your land

Data center land is often bought through newly formed companies. The buyers in our open rows include Harrisburg I, LLC, formed by Provident Realty, and RCM Hill, LLC; Becker’s buyers were Jet Stream LLC and Elk River Technologies. That is normal and keeps a project confidential while studies run, but the company on your contract may own nothing except the option, and may sell the option, or the land, to someone else.

McEowen lists the questions together: who is actually buying the property, and can the agreement be assigned? South Dublin’s answer was strict: non-transferable except to permitted parties. Owners do not always get that, but they can ask for:

• Consent to assignment, not to be unreasonably withheld, so you know who holds the option;
• A parent company that stands behind the fees, restoration and indemnities, if the optionee is a shell;
• Notice of any assignment, with the new holder’s name and address;
• A share of any premium if the option is assigned for more than the buyer paid, though many buyers will refuse this;
• The same duties for the assignee, so access, restoration and release obligations travel with the option.

The price clause inside the option

The price is usually the line owners negotiate hardest, and it is the line the option fixes longest. Three structures appear in the documents we read.

• A fixed price per acre. Xcel’s was $20,000 an acre, set by appraisal. It is simple, but over a long option you carry the risk that the land becomes worth much more.
• A price indexed to inflation. South Dublin linked its €500,000 an acre to the consumer price index for the option period.
• A base price plus contingent payments. Plug Power’s Graham sale paid $50 million at closing and up to $26.5 million more depending on the confirmed load. An earn-out like that can share the value that power creates, but read what triggers it and who controls the trigger.

Also check what “an acre” means in your contract. If the price is per acre, the contract should say whether acreage comes from a new survey or the deed, and whether roads, rights-of-way, easements and floodplain count. On large parcels the difference can be many acres.

How option fees and sale proceeds are taxed is a question for your CPA, not for us, and McEowen notes that planning opportunities can disappear once a binding contract is signed. Ask before you sign, not after.

Red flags

Most data center options are written by the buyer’s lawyers, and McEowen describes them as frequently drafted to maximize flexibility for the developer while restricting the landowner. These are the terms that should make you slow down:

1. A demand to sign a confidentiality agreement and an option on the first visit. McEowen’s opening example is exactly this: an unnamed company, an offer several times farm value, a confidentiality agreement to sign immediately and a three-year option.
2. No firm end date, or extensions the buyer can take indefinitely by paying small sums.
3. A refundable fee, or one that becomes refundable if the buyer is unhappy with its due diligence for any reason.
4. Conditions the buyer alone can declare failed, with no deadline to apply for rezoning or utility service.
5. Unrestricted access with no crop payment, restoration duty, insurance or indemnity.
6. Free assignment by a buyer with no assets and no parent company standing behind it.
7. A price fixed for many years with no escalation, especially where the buyer’s own documents show a much higher exit value.
8. No duty to release the recorded memorandum when the option ends.
9. Hidden prior rights. Butte’s deal met a right of first refusal that the buyer learned about only months before its closing date. If your land already carries a right of first refusal, a lease, an easement or a mortgage, tell your attorney before you sign anything else.

What this means for landowners and developers

If you own land near power, an option is often the first real offer you will see. It can be a good one. A fair option pays you for time, protects your farm while the buyer studies it, lets the buyer prove the site, and ends cleanly if the site does not work. A poor one ties up your land for years for little money, leaves you with damaged fields and a cloud on your title, and fixes a price that someone else may later multiply.

The way to tell them apart is the detail: the fee, who controls extensions, the conditions and their deadlines, access, assignment, the price clause and the release. Our land price data shows what buyers have paid when deals closed, and our land size guide helps you judge whether your parcel fits what buyers purchase. If a utility, rather than a data center buyer, asks for rights over your land, the rules are different, and our eminent domain guide covers them.

For developers, the lesson is the mirror image. Owners read the same filings and press reports. An option with a fair, escalating, nonrefundable fee, a clear end date, real access protections and a prompt release costs little more and is far more likely to survive a county hearing.

A checklist for your own attorney

Take this list to the attorney who will review the option, along with the draft and anything the buyer gave you in writing.

1. Who is the buyer, who owns it, and will a parent company stand behind its obligations?
2. Is this an option, a purchase contract with contingencies, an option to lease, or a right of first refusal?
3. What is the fee, when is it paid, is it refundable in any case, and is it credited against the price?
4. How long is the first term, how many extensions are there, what does each cost, and who decides whether to extend?
5. Is the price fixed, indexed or partly contingent, and how is acreage measured?
6. What conditions apply, who decides that one has failed, and by what dates must the buyer apply for rezoning and utility service?
7. What must I sign or do to help with approvals, and at whose cost?
8. What access does the buyer get, with what notice, insurance, indemnity, crop payment and restoration duty?
9. Can I keep farming, leasing and enrolling in farm programs until closing?
10. Can the buyer assign the option, to whom, and with what notice or consent?
11. What will the recorded memorandum say, and must the buyer sign a release when the option ends?
12. Does my land already carry a lease, easement, mortgage or right of first refusal that conflicts with this?
13. What happens to the zoning, the reports and the money if the buyer walks away?
14. How will the fees and the sale be taxed? Ask your CPA, before signing.
15. If you would like to know whether your land could interest a data center buyer before an agent calls, you can send us the parcel through the list your land form. Developers looking for sites can use find a site. Nothing is published or shared without the owner’s written consent, and we never promise a price or a buyer.

Sources: every document behind this guide is listed, with its date, on our Sources page.