👋👋 Good morning real estate watchers! Today, we are going to talk about how carbon capture facilities are an emerging real estate play, catching up to data centers. Except instead of training AI to write bad poetry, they’re just sucking farts out of smokestacks and burying them underground. It’s like the earth is getting a very expensive colonoscopy.

But first, here’s what we’ve been paying attention to this week…

1️⃣ Hammering Deals: Home builders are offering sales incentives at a 5-year high, with two-thirds of builders throwing deals at buyers as they struggle to sell newly constructed homes amid weak demand. Builder confidence dropped in August as housing affordability continues discouraging buyers and limiting sales across the market. (MW)

2️⃣ Yieldstreet Yields to Reality: Yieldstreet's crowdfunded real estate platform faces massive investor losses with 4 out of 30 reviewed deals written down to zero and 23 more on a "watchlist," affecting over $370M in investor capital. Rising interest rates and risky leverage have caused $78M in recognized defaults. (CRE Daily)

3️⃣ Trez-passing Cash Out: Trez Capital, managing $5.3B in assets, temporarily suspended redemptions across five open-ended real estate funds due to elevated withdrawal requests and ongoing loan commitments, while continuing monthly distributions as the firm evaluates "strategic alternatives" to manage liquidity pressures. (Yahoo!)

4️⃣ Apartment Boom Times: U.S. apartment demand surged to record levels in Q2 2025, with the highest absorption on record and national vacancy rates falling to their lowest in nearly three years. Despite these historically tight fundamentals, rent growth remained muted at below 1% for the second quarter, creating an unusual disconnect as the widening cost gap between renting and homeownership continues to drive record leasing activity. (Newmark)

5️⃣ Fed Holds Firm (Almost): The Fed’s July decision to hold interest rates steady was supported by "almost all" officials despite two governors dissenting in favor of an immediate rate cut, according to meeting minutes released Wednesday. The decision was backed by 16 out of 18 participating officials, showing broad consensus even with the notable dissents seeking lower rates. (WSJ)

TOP STORY

For the last two years, industrial land has been dominated by one storyline: the data center and AI arms race. But another boom is gathering momentum, and it’s less about training AI models than trapping carbon molecules.

Carbon capture, utilization, and storage (CCUS) facilities are industrial complexes designed to siphon greenhouse gases from smokestacks and the atmosphere. This new asset type is emerging as a new force in global property markets.

Some say this is the new industrial real estate gold rush; instead of prospectors with pickaxes, it’s hedge fund bros in Patagonia vests, competing to see who can monetize cow burps the fastest.

At the recent Carbon Capture Global Summit 2025, over 800 executives mapped out billions of dollars in planned projects across North America. Developers and investors say what’s underway now mirrors the early stages of the data center surge, except with far narrower site requirements and far higher barriers to entry.

BlackRock’s GIP fund recently acquired a 49.99% stake in Eni’s global CCUS operations (including UK, Netherlands, and Italy assets), which underscores how major infrastructure investors view carbon-capture projects not as climate gestures but as long-term industrial assets with attractive returns on capital. Meanwhile, North Dakota’s Summit Carbon Solutions plan (an approximately $4.5 billion, 2,000‑mile CO₂ pipeline network) demonstrates these developments' scale.

Moreover, the Alberta Carbon Trunk Line (a CDN$1.2 billion system transporting CO₂ to central Canadian oil reservoirs) provides a working model: infrastructure-driven land value uplift tied to government-supported clean energy corridors.

This kind of capital flow signals opportunity for U.S. developers: large-scale CCUS plants need 50–100+ acre sites near emitters, pipeline networks, and storage geology, much like ports or logistics hubs. For instance, Gulf Coast areas—like Port Arthur, Texas—are already on the radar for their subsurface Miocene sandstone, high sequestration potential, and existing emission sources.

Land in these corridor zones, previously underleveraged industrial acreage, now has ground-rental or sale potential akin to energy infrastructure land, with multi-decade cash flows guaranteed by federal incentives and long-term CO₂ offtake agreements.

CCUS projects can’t be built anywhere with cheap power, unlike cloud infrastructure. They need a very particular geography:

That makes suitable land scarce. Analysts say parcels near existing pipeline networks and deep-water ports, particularly in Texas and Louisiana, are becoming prized assets. Land footprints range from 50 to 100 acres, often larger than standard logistics sites.

The Infrastructure Investment and Jobs Act earmarked $12 billion for carbon capture, cementing federal support. Japan has approved nine advanced CCUS projects to lock away as much as 12 million metric tons of CO₂ annually by 2030. European energy firms, facing limited domestic storage, are also directing capital toward U.S. projects, betting on America’s vast underground reservoirs.

This combination of incentives and foreign capital has turned industrial zones once overlooked by institutional investors into international plays.

For landowners, this is less a speculative boom than a 30- to 50-year infrastructure play. Property that once generated modest farm rents or sat idle near petrochemical corridors is being repositioned as essential climate infrastructure.

Economic development agencies from the Gulf Coast to the Midwest are now competing to win CCUS plants the way cities once fought over auto factories. First-tier properties (those with direct pipeline ties) command the most attention. Second-tier parcels within transport distance may follow as networks expand.

Industry analysts expect carbon capture activity to scale through the 2030s as corporate climate pledges harden and technology costs decline. For investors who missed the earliest wave of data centers, CCUS offers a parallel: a specialized, infrastructure-heavy asset class with strong policy support and global demand.

The catch? Entry depends less on capital alone than being in the right place—close to carbon sources, pipelines, and storage formations. That geographic lottery already creates winners and losers across America’s industrial heartland.