The Next Frontier of Real Estate: North Dakota?
For decades, real estate investors worked from a familiar map: apartments, warehouses, malls, offices, and hotels. The artificial intelligence (AI) buildout is redrawing that map, and one of the most interesting new pins is not Manhattan, Northern Virginia, or Silicon Valley. It is North Dakota.
The reason is straightforward. AI data centers, true “AI factories,” operate under different constraints than the cloud campuses of the last cycle. Traditional data centers were often built near large population centers to reduce latency for consumer and enterprise applications. That logic helped shape the rise of Digital Realty and Equinix1, whose interconnection-rich, metro-adjacent footprints became essential hubs for networks, cloud providers, and enterprises.
AI training and large-scale inference shift the equation. These workloads are highly compute-intensive and often less latency-sensitive than traditional applications. They do not need to be next to people; they need to be next to power. Abundant, reliable, low-cost megawatts increasingly determine where the next generation of facilities gets built. That flips the old site-selection model and opens the door to energy-advantaged regions that once sat outside the traditional data center map.
Importantly, this is not a threat to Digital Realty or Equinix; we believe it is additive. Their global interconnection ecosystems remain the places where AI workloads ultimately interconnect, distribute, and reach enterprises. Training may happen in power-rich regions, but traffic still flows back through the dense network ecosystems Digital Realty and Equinix control. Both companies are already pursuing AI-aligned development through a mix of balance-sheet projects and capital-efficient partnerships, allowing them to participate in the cycle without compromising returns.
Applied Digital1 is a clear example of the new lane. In October 2025, the company announced a $5 billion, 15-year lease with an investment-grade U.S. hyperscaler at its Polaris Forge 2 campus near Harwood, North Dakota, covering 200 megawatts (MW) of critical IT load. That brought total leased capacity across Polaris Forge 1 and 2 to 600 MW with two major hyperscalers, plus a right of first refusal on additional expansion at Polaris Forge 2.
Execution matters as much as announcements. In November 2025, Applied delivered the second 50 MW phase at Polaris Forge 1, energizing the first 100 MW building in Ellendale. The broader campus is part of a 400 MW contracted deployment for CoreWeave2. For investors, contracted demand plus delivered capacity is what we believe turns a theme into an investable story.
TeraWulf2 tells the same story from a different geography. In August 2025, the company announced 10-year AI hosting agreements with Fluidstack for more than 200 MW of critical IT load at Lake Mariner in Western New York, representing roughly $3.7 billion of contracted revenue over the initial terms.
Fermi2 adds a third angle: public market appetite for AI-linked real estate and power platforms. Reuters reported that Fermi, a data center REIT focused on large-scale AI infrastructure, raised $682.5 million in its September 2025 U.S. IPO and outlined a Texas campus strategy. It is early, and execution risk is real, but investor demand was a signal.
The takeaway is simple: data centers are becoming a larger and more important part of the real estate investment universe, and the center of gravity is shifting toward power-rich regions. North Dakota may sound unconventional today, but that is often how the next frontier sounds at the beginning. As the AI buildout enters its next phase, the ability to secure power and deliver capacity is becoming the defining constraint and the defining opportunity.
This dynamic reinforces why we remain overweight data centers in our portfolio. The combination of structural demand, limited near-term supply, and contracted megawatt growth creates a rare alignment of theme and fundamentals. In an environment where execution matters, that alignment is difficult to ignore.
1 The issuers were selected as representative examples of the growing data center industry. While Easterly does manage real estate portfolios that hold a subset of the examples, they are not representative of the performance or characteristics of Easterly’s real estate strategy. Additional information regarding the strategy is available at Easterlyam.com.
2 References to securities, transactions or holdings should not be considered a recommendation to purchase or sell a particular security and there is no assurance that, as of the date of publication, the securities are held in the portfolio. Additionally, it is noted that the securities or transactions referenced do not represent all of the securities purchased, sold or recommended during the period referenced and there is no guarantee as to the future profitability of the securities identified and discussed herein.
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1 The issuers were selected as representative examples of the growing data center industry. While Easterly does manage real estate portfolios that hold a subset of the examples, they are not representative of the performance or characteristics of Easterly’s real estate strategy. Additional information regarding the strategy is available at Easterlyam.com.
2 References to securities, transactions or holdings should not be considered a recommendation to purchase or sell a particular security and there is no assurance that, as of the date of publication, the securities are held in the portfolio. Additionally, it is noted that the securities or transactions referenced do not represent all of the securities purchased, sold or recommended during the period referenced and there is no guarantee as to the future profitability of the securities identified and discussed herein.
| Top 10 Holdings (%) | |
|---|---|
| American Healthcare REIT, Inc. | 6.41% |
| Welltower, Inc. | 6.20% |
| Digital Realty Trust, Inc. | 5.82% |
| Equinix, Inc. | 5.69% |
| UNITE Group plc (The) | 5.02% |
| VICI Properties, Inc. | 4.84% |
| Cellnex Telecom S.A. | 4.82% |
| Grainger plc | 4.18% |
| Goodman Group | 3.75% |
| NETSTREIT Corporation | 3.32% |
| Total | 50.05% |
As of 12/31/2025. Listed holdings reflect the holdings of the Easterly Global Real Estate Fund’s portfolio and may change at any time. They are not recommendations to buy or /sell any security. Data is expressed as a percentage of net assets and excludes cash and cash equivalents. Fund characteristics will vary over time.
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Easterly Investment Partners LLC is an SEC registered investment adviser. Easterly Snow and Easterly Ranger are investment teams of Easterly Investment Partners LLC. EAB Investment Group LLC (d/b/a Easterly EAB) and Orange Investment Advisors LLC (d/b/a Easterly Orange) are separate SEC-registered investment advisers that are strategic partners of Easterly. Each investment adviser’s Form ADV is available at www.sec.gov. Registration does not imply and should not be interpreted to imply any particular level of skill or expertise.
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