The disclosure and our analysis
Evidence dates
Evidence: Zone Frontier Form 8-K (Item 1.01) and press release (Exhibit 99.1); ground lease dated September 24, 2026, release dated September 29, 2026.
What Zone disclosed
A Zone Frontier subsidiary entered into a ground lease with GKC Operating, LLC on September 24, 2026, covering about 4,077 acres in Potter County, Texas. The site surrounds the existing Potter County 345 kV substation of Southwestern Public Service Company, an Xcel Energy company, in the Southwest Power Pool region. Zone is developing the campus with HST Technologies, Inc. [Source 1] [Source 2]
Zone may designate 200 to 800 acres for data center facilities and at least 1,800 acres for solar generation, battery storage and support infrastructure. The company says the rest could host other uses, which it believes could include natural gas generation. [Source 1]
Lease terms
| Term | Disclosed figure |
| --- | --- |
| Initial term | 30 years from rent commencement, two 10-year extensions |
| Data center area rent | $6,000 per acre per year |
| Solar area rent | $1,000 per acre per year |
| Rent start | Only when construction starts on that area |
| Escalation | Five-year rolling average CPI increase |
| Structure | Absolute triple net |
| Revenue share | 0.5% of data center revenue, eliminated if the purchase option is exercised |
| Purchase option | $100,000 per acre before on-site generation reaches commercial operation, $135,000 per acre after |
| Deposit | $250,000 in escrow on recording, credited to any purchase |
Source: Form 8-K, Item 1.01. [Source 1]
The lease includes a long-term water supply agreement drawing on water rights tied to the property. [Source 1]
Conditions and outs
The lease does not commence until conditions precedent for Zone's benefit are met or waived. They include acceptable title, utility commitments for at least 200 MW of firm service, water supply commitments, an interconnection agreement, required government approvals and completion of diligence. [Source 1]
Zone controls a one-year inspection period, extendable by one year, and may terminate before it ends. If construction has not started on a site area within 48 months, the landlord may terminate the lease and purchase option for that area. Zone is not required to start construction by any date. [Source 1]
What the megawatt figures mean
Zone's release says the campus is "sized to an initial 200 MW with potential to expand beyond 500 MW." The release does not state whether those figures are utility service, total campus power or IT load. The 8-K's 200 MW figure is a condition: utility commitments for at least 200 MW of firm service. That is a utility service figure, and Zone has not said it has obtained it. [Source 1] [Source 2]
Zone says it is now focused on "securing tenants, advancing permitting, and completing power and interconnection studies." [Source 2]
Our arithmetic on the rent
This is our calculation from the disclosed rates. Once construction starts, data center area rent would be about $1.2 million a year at the 200 acre minimum and $4.8 million at the 800 acre maximum, before escalation and the revenue share. Buying the full 800 acres would cost $80 million before on-site generation reaches commercial operation, or $108 million after. Solar area rent on the 1,800 acre minimum would be $1.8 million a year once built.
Buyer analysis
This is our analysis.
**This is a land and power option, not capacity.** No tenant, interconnection agreement, firm utility commitment or permit is disclosed. Nothing here is available or under construction.
**The structure favors the developer.** Rent waits for construction, and Zone can walk away during inspection. That keeps carrying cost low, but it also means the landlord, not just Zone, can end the deal if construction does not start within 48 months.
**On-site power is part of the plan.** The required solar and battery acreage, plus Zone's mention of possible gas generation, signals a mixed grid and on-site supply model. Buyers looking at Texas Panhandle sites should ask how much load would be grid served, how much on-site, and on what schedule.
**Developer track record.** Zone's risk factors note its continuing transition from a cleaning services business and its lack of data center operating history. Its other project, a Minnesota campus with a Cerebras colocation agreement, is expected by Zone to produce revenue in the first half of 2027. [Source 2]
