Cipher Digital CEO Defends Barber Lake Lease Extension After Investor Questions Timing

• Cipher Digital CEO Tyler Page on X defended the company’s Barber Lake lease renewal after some investors questioned the timing of it.
• Page said the contract locks in high rates today for a lease that begins 10 years from now.
• The expansion brings around $5.2 billion in additional revenue and puts the site’s contracted revenue beyond $9 billion, Cipher said.

Cipher Digital (CIFR) CEO Tyler Page defended the company's Barber Lake lease extension after some investors had asked why Cipher locked in rent for a lease that starts 10 years from now.

Page said on X that Cipher had never seen interest in a lease so far out at such rates. He said the deal locks in today’s peak rates for a lease that starts 10 years from now. "This is evidence of a long-term sustained demand environment," he said. 

Cipher said it had extended the Barber Lake lease to 20 years. The deal lifted contracted revenue at the site to over $9 billion. According to Cipher, Fluidstack has a 10-year lease on the property, after which an undisclosed AI lab will take a 10-year lease on the Texas site, generating about $5.2 billion in revenue.

Investor Flags Below-Market Rates

Page’s response came to an X user who believed that Cipher may have undersold its Barber Lake site. As the new lease carries terms consistent with the original one, they read the extra $5.2 billion as coming mostly from built-in rent escalators that offset inflation in years 11 to 20, not from higher pricing. Moratoriums and construction delays have driven spot rates up, they said, so waiting might have produced better terms. 

Page was quick to address the issue of “Why sign now? Why not wait?”

Why Cipher Didn't Wait

Page said waiting for higher rates meant never signing a lease at all, adding that “I don’t believe that is a winning strategy.” 

Page said tenants pay the most for premises that will be ready shortly. Today, most leases negotiated are for properties that will be ready in 12 to 18 months. He added the leases are going at the highest rates Cipher has seen. A site ready in 2030 or beyond is different. Page said that a hyperscaler might only get 7% to 8% yield on cost for it. Cipher wouldn’t sign at that level, he claimed. 

Page added, “Presumably this logic is based on the idea that we should just wait 8.5 years until interest will be higher. My answer is that we have never seen interest at today’s elevated rates for a lease starting that far in the future, and it provides an excellent projected IRR on our investment.”

CIFR stock closed down over 2% on Friday. On Stocktwits, retail sentiment around CIFR remained in the ‘neutral’ zone, accompanied by ‘normal’ chatter levels over the past day. 

CIFR is up over 20% so far this year and up more than 52% over the last 12 months.

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