Lightstone: Spartanburg, a real power advantage that still is not an income-producing asset
Spartanburg gives Lightstone something genuinely scarce: 151 acres with a Duke Energy commitment for 60 MW starting in September 2026. But until a lease is signed, expected revenue can actually be defined, and phase-two development is funded on disciplined terms, this is still powered land with option value rather than an income-producing asset.
The main article argued that Lightstone's improved asset base is now running into a higher cost of funding. Spartanburg isolates a different thread. This is not just another property that needs time to enter NOI. It is land with a real infrastructure edge that still has to be converted into a signed lease, disciplined development spend, and only then into income.
What has already been de-risked is not trivial. The site covers about 151 acres in Spartanburg, South Carolina, and includes a Duke Energy commitment to provide 60 MW starting in September 2026. The company itself frames near-term power availability as the main differentiator of the site, which is why Spartanburg already reads as more than an ordinary undeveloped parcel.
But this is exactly where the reading has to stay disciplined. Power is not a lease, and a lease is not an operating Data Center. The company itself classifies its plans for the project as forward-looking information based on negotiations with potential tenants. Near the filing date, the company and its partners were still looking for a tenant and negotiating with a potential tenant in AI, cloud computing, and GPU workloads. So Spartanburg is no longer generic land, but it is still not an income-producing asset.
What Is Already De-risked
The core point is the separation between infrastructure risk that has already been reduced and commercial risk that still remains open. Spartanburg looks interesting because the first part is real. The project-under-development table includes the land, the power commitment, phase-one infrastructure work, and the fact that there was no asset-level debt at year-end 2025. In other words, Lightstone has not yet layered property debt onto the site, and it has not pushed the project into a heavier build-out phase before securing a tenant.
That matters for two reasons. First, the project's edge is not empty marketing. It rests on a concrete input, 60 MW from September 2026. Second, the balance-sheet presentation is still relatively clean at the asset level. The project is shown with a book value of $18.088 million and zero asset debt at the end of 2025, and in the investor presentation it is also described as having no debt or liens. That is a good starting point because it keeps the option relatively clean while the heavier development phase has not yet begun.
At this stage, the option rests on disclosed infrastructure and a relatively clean balance-sheet posture, not on income that does not yet exist.
| Link In The Chain | What Is Already Known | Why It Matters | What It Still Does Not Solve |
|---|---|---|---|
| Land | About 151 acres in Spartanburg, South Carolina | There is a real physical platform behind the project | Land alone does not generate rent |
| Power | Duke Energy commitment for 60 MW starting in September 2026 | This is the infrastructure edge on which the company builds the project story | Future power availability is not the same as a signed tenant |
| Phase One | Horizontal infrastructure and a substation with estimated total cost of $11.8 million, about $5.3 million Lightstone's share | There is an initial and disclosed path to make the site more marketable | This is still preparation spend, not NOI-producing spend |
| Balance Sheet | $18.088 million book value and zero asset debt at year-end 2025 | The option has not yet been levered at the property level | Once phase two starts, financing becomes a live issue again |
| Ownership | Lightstone owns about 45% | The upside has to be read at Lightstone's share, not as if this were wholly owned | Even in a strong outcome, not all of the economics accrue to the company |
Why It Still Is Not An Income-Producing Asset
The easy mistake here is to read the power edge as if it were already NOI. The project table leaves two fields deliberately open: the expected completion date and expected annual revenue. Both will only be set after a lease is signed. That is not a technical footnote. It is the whole point.
Spartanburg has already passed the land-and-power test, but it has not yet passed the commercialization test. There is no signed tenant, no revenue target, no final completion date, and phase two is explicitly deferred until after a lease is executed. Anyone who already wants to assign stabilized yield, NOI, or financing coverage to the project is moving too far ahead of the evidence.
The distinction between phase one and phase two is therefore critical. Phase one is site preparation, horizontal infrastructure, and a substation. That reduces part of the execution risk and improves the quality of the option. Phase two is the point at which the project tries to become an actual income-producing asset. The annual filing ties that step directly to a signed lease. The company is not presenting Spartanburg as a ready-to-build speculative Data Center on a standalone basis.
That is why the project is more interesting than it is mature. If the reader wants proof of income, it is not there yet. If the reader wants proof of real optionality, there is already something concrete to work with.
The Deal Structure Matters Too
Spartanburg is not only a power story. It is also an ownership-structure story. In December 2025 the transaction was approved as the acquisition of a Data Center property in South Carolina known as Spartanburg Power, alongside entities controlled by the controlling shareholder on identical pro rata terms and alongside a third-party partner. Lightstone's share is about 45%.
That has a double implication. On the one hand, it does not diminish the quality of the site. If the asset is leased and successfully developed, the company retains exposure to a property with a relatively rare characteristic. On the other hand, the project should not be read as if the entire future value were fully accessible to Lightstone. Any future economics, if they arrive, will come through a minority share inside a partner structure rather than through a wholly owned property sitting cleanly at the listed-company layer.
That matters even more because the current cleanliness of the story comes from the fact that the heavy part of the project has not started yet. There is no asset debt, no liens, and no signed lease. It looks clean because the financing burden of full development has not arrived. That is why an early-stage, relatively unlevered option should not be confused with an income-producing asset that has already cleared the tests of construction, leasing, and financing.
What Has To Happen Next
Spartanburg is a proof year of its own. Not for the entire company, but for the sequence that has to happen before infrastructure optionality becomes real economics.
The first stop is a signed lease with a real tenant. Until that happens, the project does not have an economic anchor that would allow the market to assess yield, NOI, or permanent financing. The fact that the company is targeting a potential tenant from the AI, cloud, and GPU universe explains why the site attracts attention, but it also highlights how much of the story still depends on one meaningful signature.
The second stop is capital discipline. Phase one is estimated at $11.8 million in total, of which about $5.3 million is Lightstone's share. That is digestible within the broader portfolio. But the real question is not phase one. It is how much capital will be required after a lease is signed, in what structure, and with what financing. If phase two moves forward behind a strong lease and a clean funding plan, the read on the project can improve quickly. If capital starts moving before the commercial piece is locked in, the story changes.
The third stop is the conversion of committed power into usable delivery. A 60 MW commitment from September 2026 is a strong starting point. But the market will not price that the same way it prices a functioning Data Center until it sees a direct line from power availability to substation progress, signed tenancy, and actual operation.
That is why the right way to read Spartanburg today is not "Lightstone has entered Data Centers," but "Lightstone owns a relatively high-quality option on entering Data Centers." The wording gap is small. The economic gap is large.
Bottom Line
Spartanburg is one of the more interesting assets in Lightstone's portfolio precisely because it still is not an income-producing asset. The power advantage is real, scarce, and enough to support the idea that there is genuine option value here. But that value still sits in the preparation layer, not in the income layer.
Current thesis in one line: Spartanburg is land with a real power edge and a credible path toward a Data Center use case, but until a lease is signed and phase-two capital is handled with discipline, it should be read as a promising option rather than as future NOI that can already be counted.
That is exactly what makes it worth isolating. Anyone who dismisses the project as just another land parcel misses the scarcity value of the power commitment. Anyone who already treats it like a producing asset misses the fact that the crucial commercial step, tenant, revenue, and full development structure, has not yet been locked in.
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