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The Data Center Power Crisis: Why Smaller Sites Are Winning with Kris McGee · Carson's Corner: Entrepreneurship & Investing

• 0:00
  SPEAKER_02: It's land, power, and shell.
• 0:01
  SPEAKER_02: That's really just not a slogan anymore.
• 0:04
  SPEAKER_02: That's a risk factor.
• 0:05
  SPEAKER_02: Connecting the power to the data center is their biggest risk.
• 0:09
  SPEAKER_00: Today's guest is Chris McGee, a 33-year commercial broker who walks old industrial sites looking for the one thing every data center now needs power.
• 0:19
  SPEAKER_02: You don't need a thousand acres.
• 0:20
  SPEAKER_02: Some of these big mega campuses where you have 1,000, 1500, 800, 900 acres.
• 0:25
  SPEAKER_02: They're finding that you don't need as big a sites depending on where you are.
• 0:30
  SPEAKER_02: If you've got power, that changes everything.
• 0:32
  SPEAKER_02: 50 megawatts is a lot of power.
• 0:33
  SPEAKER_02: We forget about that.
• 0:34
  SPEAKER_02: You don't ever need a gigawatt right away.
• 0:37
  SPEAKER_02: No.
• 0:37
  SPEAKER_02: Not just star.
• 0:38
  SPEAKER_01: A lot of the communities are it's a lot of knee-jerk reactions where they're just throwing up walls and they've never even had a data center there.
• 0:44
  SPEAKER_01: Or a data center properly structured could pay for a high school or a lot of other things in some of these towns.
• 0:50
  SPEAKER_01: Let's be honest, data center doesn't belong everywhere.
• 0:53
  SPEAKER_02: One of the biggest proponents we need to stand these things up.
• 0:56
  SPEAKER_02: But the way that developers have approached data centers in the past has really helped to give them a bad reputation.
• 1:02
  SPEAKER_02: It was very opaque.
• 1:03
  SPEAKER_02: There were a lot of NDAs with government officials, with planning boards.
• 1:07
  SPEAKER_02: The community's gotta be first.
• 1:08
  SPEAKER_02: I mean, you've got to involve communities.
• 1:10
  SPEAKER_02: You've got to give them a buy-in.
• 1:12
  SPEAKER_01: There's a difference between a little gas and a lot.
• 1:14
  SPEAKER_01: A lot of them may serve as some sort of generation, but not gonna be your main source of energy.
• 1:20
  SPEAKER_01: It's usually enough to get started and not enough to fuel the whole thing.
• 1:24
  SPEAKER_01: The grid needs to be upgraded.
• 1:26
  SPEAKER_02: Doubling the size of the grid every 10 years through the 70s, and then we stop.
• 1:30
  SPEAKER_02: China's been doubling their grid.
• 1:32
  SPEAKER_02: We're just behind.
• 1:33
  SPEAKER_01: There's gotta at least be a clear path to the power.
• 1:36
  SPEAKER_02: What we have in this space right now is more like the oil boom.
• 1:40
  SPEAKER_02: A lot of wildcatters, a lot of people seem to get rich quick.
• 1:43
  SPEAKER_02: You only need one well to hit, right?
• 1:45
  SPEAKER_02: There's about 500 gigs announced, and I think about 170 is what they're saying will get built.
• 1:51
  SPEAKER_01: Do you see a lot of the developers building up higher?
• 1:54
  SPEAKER_01: If you look at when XAI's Colossus went into Memphis on 700 acres, and now you're seeing companies literally build three and four stories high.
• 2:04
  SPEAKER_01: How do you see that playing out?
• 2:05
  SPEAKER_02: Well, that's a good question.
• 2:07
  SPEAKER_02: There's already data centers in.
• 2:09
  SPEAKER_01: Let's talk about sites.
• 2:11
  SPEAKER_01: Memphis is available.
• 2:12
  SPEAKER_02: Do you want to talk about that?
• 2:13
  SPEAKER_02: It's a really good site, I think.
• 2:15
  SPEAKER_02: You know.
• 2:18
  SPEAKER_02: Welcome to the Carson's Quarter.
• 2:21
  SPEAKER_01: Alrighty, I'm sitting here with Mr.
• 2:23
  SPEAKER_01: Chris McGee, investor broker, to discuss data centers.
• 2:27
  SPEAKER_01: What's going on with that?
• 2:29
  SPEAKER_01: Uh Anthropic just announced today that they are going public, or maybe not announced, but made it official.
• 2:37
  SPEAKER_01: Um, one thing they mentioned is that uh one of their biggest constraints and challenges is finding powered land for data centers.
• 2:47
  SPEAKER_01: Um that's a big deal.
• 2:49
  SPEAKER_01: Um, OpenAI and Anthropic and some others are actually going after smaller sites right now due to the fact that they're quicker to get online in a lot of cases, versus the big ones take forever to develop and run into issues.
• 3:06
  SPEAKER_01: Chris, how you doing today, man?
• 3:08
  SPEAKER_01: Good, Carson.
• 3:08
  SPEAKER_01: How about you?
• 3:09
  SPEAKER_01: Very, very good.
• 3:11
  SPEAKER_01: Um just glad to have you here.
• 3:14
  SPEAKER_01: Glad to talk about what's going on.
• 3:17
  SPEAKER_01: And um, you know, a lot has happened.
• 3:20
  SPEAKER_01: It seems like every day there's some sort of regulatory thing or moratorium or something like that.
• 3:27
  SPEAKER_01: And just kind of wanted to talk about current issues, um, deals that we have going on that we're allowed to talk about, and you know, all that.
• 3:39
  SPEAKER_02: So well, I think uh one of the things you're talking about on anthropics announcement, uh we kind of miss on where their valuation was where they want that to come in.
• 3:51
  SPEAKER_02: Um which is what what are we looking at?
• 3:56
  SPEAKER_02: Uh two trilli two trillion, three trillion.
• 3:59
  SPEAKER_02: Um the number keeps moving.
• 4:02
  SPEAKER_02: And I have heard I've heard that it needs to be um at least two trillion for them to have enough to raise enough money for their compute.
• 4:16
  SPEAKER_02: Um they're gonna need about five hundred billion.
• 4:19
  SPEAKER_02: Yeah, uh you know, they're gonna need uh about five hundred billion.
• 4:24
  SPEAKER_02: Um and you know, it lets you know that the demand is still there, but uh the issue that the that they're gonna have, just like you said, uh it's land power and shell, right?
• 4:36
  SPEAKER_02: Um and it that's really just not a slogan anymore.
• 4:39
  SPEAKER_02: That's it's a it's a risk factor, it's in the prospectus, it's what they told the SEC connecting the power uh is and um connecting the power to the data center is their biggest risk.
• 4:52
  SPEAKER_02: So getting the data centers stood up um and stood up, you know, in um in uh I how do I put it?
• 5:04
  SPEAKER_02: Uh I can't say quickly because it'll go up quickly, but um get them get them up in a reasonable amount of time.
• 5:13
  SPEAKER_02: Um you know, you hit on it a little bit saying they're they're going for some smaller sites.
• 5:19
  SPEAKER_02: They're going for some smaller powered land sites that maybe were heavy industrial uh in the past.
• 5:26
  SPEAKER_02: You're starting to see um more jumping into that uh on some of these aluminum smelter um plants that people weren't touching.
• 5:36
  SPEAKER_02: Uh they're looking at that for the power now.
• 5:39
  SPEAKER_02: And um and some of the smaller sites that were heavy industrial with some power, even if they're smaller power, they're they're jumping in.
• 5:46
  SPEAKER_02: But there's still there's still issues with those sites.
• 5:49
  SPEAKER_02: And even though that they're um they have been heavy industrial usage, they they're getting cleaned up, um, the communities are still pull pushing back.
• 5:59
  SPEAKER_02: That's that's still a real deal that that's helping slow things down, right?
• 6:03
  SPEAKER_01: Yeah.
• 6:03
  SPEAKER_01: Helping slow things down, right?
• 6:06
  SPEAKER_02: Right.
• 6:06
  SPEAKER_01: I'm saying helping because there's a lot of things that slow down the process, but that that helps except I think a lot of the uh the the data centers are starting to realize that you know the community involvement and what it takes to you know sway the community.
• 6:23
  SPEAKER_01: So they're kind of offering more uh incentives for the community if it's done right.
• 6:28
  SPEAKER_01: You know, but a lot of the communities are it's a lot of knee-jerk reactions where they're just throwing up laws and they've never even had a data center there, where a data center, if properly structured, could pay for a high school or a lot of other things in some of these towns.
• 6:43
  SPEAKER_01: So, you know, it's not all bad with the data center, so you know.
• 6:48
  SPEAKER_02: No, uh and and let's be let's be honest, data center doesn't belong everywhere, right?
• 6:53
  SPEAKER_02: I mean, I'm one of the biggest proponents.
• 6:54
  SPEAKER_02: We need to we need to stand these things up.
• 6:57
  SPEAKER_02: We need to beat China.
• 6:58
  SPEAKER_02: Uh um, I think it's imperative, and I I think we need them for um national security as well.
• 7:06
  SPEAKER_02: But um the the uh the the way that developers had approached data centers in the past um has really given it helped to give them a bad reputation.
• 7:25
  SPEAKER_02: It was very opaque.
• 7:26
  SPEAKER_02: There were a lot of NDAs um with government officials, with planning boards, um and and rightly so with with some of them um trying to acquire properties without um the price going through the roof.
• 7:42
  SPEAKER_02: If you know you're selling to Facebook or Meta or Amazon, um are they get a deal.
• 7:49
  SPEAKER_02: But wrongly so on them, on the um developers not in the hyperscalers not involving the community.
• 7:56
  SPEAKER_02: I think that's all shifted and changed.
• 7:58
  SPEAKER_02: The community's gotta be first.
• 7:59
  SPEAKER_02: I mean, you've got to involve communities, you've got to give them the buy-in.
• 8:04
  SPEAKER_02: We've got to do a really good job on educating the communities, right?
• 8:09
  SPEAKER_02: So a lot of people are saying, oh, this education out there.
• 8:12
  SPEAKER_02: Well, it's our job to go in and and really set the facts straight.
• 8:16
  SPEAKER_02: But for um our clients, developers, um, and for the hyperscalers, for anybody doing these data centers, even small ed set data centers, go in and engage with the community early and really, really have a good game plan with the community.
• 8:32
  SPEAKER_02: A lot of these uh people don't know uh how where to start or how to do it.
• 8:38
  SPEAKER_02: I've had conversations on where do I start, what do we do?
• 8:42
  SPEAKER_02: Well, you start early and you start with some town meetings.
• 8:45
  SPEAKER_02: There's a developer doing one in uh looking at a site in Ohio right now, and um they're just looking and they're starting engagement with the community now.
• 8:56
  SPEAKER_02: Get the buy-in early, get it early, educate, show the benefits, and see if you can work together and and see if it is going to be a good fit.
• 9:06
  SPEAKER_02: Um, you know, and and that it works for everybody and can be a win-win.
• 9:11
  SPEAKER_02: Um that the that that that development could be win-win-win, right?
• 9:16
  SPEAKER_02: Uh everybody wins.
• 9:17
  SPEAKER_02: Uh we need, like I said, we need them, we need them stood up.
• 9:20
  SPEAKER_02: Communities can benefit, and then the the uh data center developers can benefit by hopefully um helping speed up the process.
• 9:29
  SPEAKER_02: Some of those uh planning processes, especially some of the hearings, are really dragging out, dragging things off.
• 9:36
  SPEAKER_01: Yeah.
• 9:37
  SPEAKER_01: Sometimes uh years, not just a few months, you know.
• 9:40
  SPEAKER_01: Um people that are used to dealing with delays and like multifamily and stuff think three months or six months is a delay.
• 9:47
  SPEAKER_01: Some of these projects are getting kicked back, you know, one, two years just because of all the regulatory hangups.
• 9:55
  SPEAKER_02: So not just one, two years.
• 9:59
  SPEAKER_02: Um some of them are are been in in planning and in with their applications going through the process for yeah, uh even longer than that and now kicked out.
• 10:11
  SPEAKER_02: Um, you know.
• 10:12
  SPEAKER_02: Yeah.
• 10:13
  SPEAKER_02: So some are getting kicked out or some some developers are pulling their applications a little bit earlier now because they know they're not going to um get through.
• 10:23
  SPEAKER_02: Amazon just pulled theirs on uh their campus at George Washington University in Virginia.
• 10:29
  SPEAKER_02: Um that's up in you know, data center alley, but it wasn't a good fit and it's not what the university wanted.
• 10:39
  SPEAKER_02: Amazon paid what$427 million for that site.
• 10:43
  SPEAKER_02: They're gonna donate twenty donate twenty five acres for housing and uh they're gonna donate uh some money as well.
• 10:52
  SPEAKER_02: So wow.
• 10:53
  SPEAKER_01: Yeah, not not every uh city and town and state are against data centers, you know.
• 10:59
  SPEAKER_01: Um the smart ones are kind of planning, you know.
• 11:03
  SPEAKER_01: It's it's one of those things where this thing snuck up on us and nobody planned for it.
• 11:08
  SPEAKER_01: You know, welcome to America.
• 11:10
  SPEAKER_01: It seems like that's the way it is on all of our infrastructure, you know, even the roads and other things that we uh have.
• 11:18
  SPEAKER_01: If you're live in the Nashville area, it feels like it's gonna explode and the roads aren't wide enough, you know.
• 11:25
  SPEAKER_01: So I mean, uh none of this should be a shock if you've lived here for more than you know, five years.
• 11:31
  SPEAKER_02: So anyway, um well, none of it's a shock on uh um people will push back on just about any any type of growth, anything you pull through parks and you know, open space, um any type of development.
• 11:48
  SPEAKER_02: It's not just data centers.
• 11:50
  SPEAKER_02: I mean, I've been doing this 33 years, and we're we've been in these fights on pr pretty much every type of development.
• 11:57
  SPEAKER_02: This is just more organized and more at a national scale.
• 12:01
  SPEAKER_01: Yeah, it's uh definitely organized.
• 12:04
  SPEAKER_01: Some of it's uh real local protest, and then some of it's uh paid for coming from China, in my opinion.
• 12:10
  SPEAKER_01: You know, China doesn't want us to win the AI race, and you know, um it's demonized online a lot.
• 12:17
  SPEAKER_01: You know, everybody's scared that AI is gonna take their job and all that.
• 12:21
  SPEAKER_01: So it gets like the local community, like they hate AI because they picture it replacing them, you know.
• 12:28
  SPEAKER_01: And most of the time AI just makes your life a little bit easier.
• 12:31
  SPEAKER_01: It'll be about like the internet.
• 12:33
  SPEAKER_01: You know, there will be some jobs that get cut, but there will also be some jobs that get added with AI as well.
• 12:40
  SPEAKER_01: So, you know, it's not like you know, everybody pictures like they're gonna lose their job tomorrow.
• 12:45
  SPEAKER_01: But we we didn't ride in a um driverless uh vehicle.
• 12:50
  SPEAKER_01: Uh you know.
• 12:52
  SPEAKER_02: Speaking of losing your jobs.
• 12:54
  SPEAKER_02: And and really the the job apocalypse hasn't hit, right?
• 12:57
  SPEAKER_02: And um, you're finding out that that in some of these cases that we're they're needing to hire more people.
• 13:04
  SPEAKER_02: I I do think that overall, I I'm uh of the abundance mindset.
• 13:09
  SPEAKER_02: I do think AI is going to create abundance for all.
• 13:13
  SPEAKER_02: Um and I really I really do.
• 13:15
  SPEAKER_02: I firmly believe that.
• 13:17
  SPEAKER_02: Um you know the online social media, yeah, can stir up a a lot of fears.
• 13:24
  SPEAKER_02: Once again, going back into how we have to do our job and really bring in facts and really educate people and and show what the benefits are.
• 13:32
  SPEAKER_02: But yeah, that speaking of um Uber drivers losing their job, dri riding in the Waymo in Atlanta at that data center conference, uh what a phenomenal experience.
• 13:43
  SPEAKER_02: Um that was my first time.
• 13:44
  SPEAKER_02: Yeah yours too, right?
• 13:46
  SPEAKER_02: Yeah.
• 13:47
  SPEAKER_02: And yeah.
• 13:49
  SPEAKER_02: I I thought the experience was phenomenal.
• 13:52
  SPEAKER_02: Um I've talked to a lot of people and they're like, oh yeah, you don't have to talk to anybody if you don't want.
• 13:57
  SPEAKER_02: What I liked about it, and it could be because of how many are on the road in Atlanta because of uh Waymo using that as a test market, but man, um even on the app, you know, the Uber driver was gonna take 13 minutes, and then uh if you chose a driverless car, pull right up.
• 14:17
  SPEAKER_02: It was kind of crazy.
• 14:19
  SPEAKER_01: Yeah, the real drivers act the real drivers were taking longer than that when I got them, but you know, so I I think when the labor market when the labor market's constrained, you know, I'm not opposed to it.
• 14:32
  SPEAKER_01: I don't want to replace everybody that's willing to work.
• 14:34
  SPEAKER_01: If somebody's willing to work, I'm not in favor of firing them.
• 14:37
  SPEAKER_01: But at the same time, you know, I've ran a business where it's like impossible to find people, you know.
• 14:44
  SPEAKER_01: So um, no, I I thought it was a wonderful experience.
• 14:47
  SPEAKER_01: I was a little nervous when I first got into the thing.
• 14:50
  SPEAKER_01: For sure.
• 14:50
  SPEAKER_01: If I'm being if I'm being honest about it, I was like, oh God.
• 14:54
  SPEAKER_02: Well the big thing, I think the big thing I thought uh nerve-wracking driving through um Georgia Tech, right in between classes when there were pedestrians everywhere and no lights, right?
• 15:07
  SPEAKER_02: Just the flashing.
• 15:08
  SPEAKER_02: That that was a really good test.
• 15:10
  SPEAKER_02: And um it it was amazing.
• 15:13
  SPEAKER_02: Um it blew us both away.
• 15:15
  SPEAKER_02: They're just like, oh my god, it look at that.
• 15:17
  SPEAKER_02: It's all pedestrian over here and and stock, but uh they're 10 times safer.
• 15:22
  SPEAKER_02: Um the statistics are are showing.
• 15:25
  SPEAKER_02: Um I think it's at least 10 times safer than us driving.
• 15:29
  SPEAKER_02: Yeah.
• 15:30
  SPEAKER_02: My wife probably prefer that than me driving.
• 15:34
  SPEAKER_01: Yeah, I was just saying.
• 15:36
  SPEAKER_01: Yeah, it's better than your husband driving.
• 15:39
  SPEAKER_01: Oh man.
• 15:40
  SPEAKER_01: Um so you know, a lot of the companies, um, you know, I was just on another podcast and you know, they brought up about the gas, you know, that's a that's a big deal on these sites on the powered land and the warehouses and stuff like that, having natural gas or some sort of gas to run uh electricity off of.
• 16:01
  SPEAKER_01: So um is that becoming like a bigger deal because it's harder to get the power through the city?
• 16:07
  SPEAKER_02: So they're well uh I think it was a workaround, uh, really at first, you know, the the bring your own power, it kind of changes what your land's worth.
• 16:17
  SPEAKER_02: If you have the opportunity and you have um large enough gas service and then you can get the lateral in um in time and you can actually get um contracts, it was quicker to get behind the meter while you were waiting in line and stand up um um some of the behind the meter power.
• 16:39
  SPEAKER_02: But that that slowed down now.
• 16:41
  SPEAKER_02: Um there it Texas is still huge on that, especially with what Abbott has going on with with the audits and um now the environmental um audits, but you you uh you still need to build the the the power plant, you still need turbines, you still need transformers, and there's a backlog on those.
• 17:05
  SPEAKER_02: Uh what it does get you through is um uh maybe give some of these developers a little more certainty.
• 17:12
  SPEAKER_02: I know that we've got one client working with.
• 17:15
  SPEAKER_02: Um they're huge behind the meter.
• 17:18
  SPEAKER_02: That's all that they want to look at is to make sure that there's a lot of natural gas, and that that's their um that's their business plan, right?
• 17:26
  SPEAKER_01: Is the theory like, hey, if the city says, get the hell out of here on the power, they can just use the gas and say, okay, well, we'll just use this instead, and it's like a replacement.
• 17:36
  SPEAKER_01: It's almost like a hedge against the uh power.
• 17:39
  SPEAKER_01: I don't know, or a backup, you know?
• 17:41
  SPEAKER_02: Aaron Powell Not necessarily.
• 17:43
  SPEAKER_02: It's yeah.
• 17:43
  SPEAKER_02: I mean, if there's not the space on the grid uh or the time frame or the the weight in the queue is seven years, like it like it was.
• 17:52
  SPEAKER_02: Um still it in some places, uh, or if there's a lot of the pretenders in the queue clogging it up, uh it was a quicker way to get power.
• 18:03
  SPEAKER_02: It is it a way to get around the regulation of um no.
• 18:09
  SPEAKER_02: Um you you still need to go through a lot.
• 18:12
  SPEAKER_02: And like if you look at look at Memphis, what they're going to put through right now when you're talking about in in cities, even if you're behind the meter, that's gonna count.
• 18:22
  SPEAKER_02: Um that's gonna count to your energy usage, right?
• 18:26
  SPEAKER_02: And how you regulate it.
• 18:28
  SPEAKER_02: So well, is it a workaround?
• 18:31
  SPEAKER_02: Yeah, I mean it's a behind the meter, but you if you can't just say it's it's to get around what what the the municipalities or the cities um are saying it's it's more to to do with the grid.
• 18:45
  SPEAKER_02: You've got other places uh that really would like to get um people behind the grid, um, but then they have regulations on um or off-grid.
• 18:55
  SPEAKER_02: Uh Illinois would um prefer people firing up gas power plants, but you can only do it at 25 megawatts because they're clean energy.
• 19:05
  SPEAKER_02: So um, you know, and these are non-merchant plants uh serving on-site, um, which was quicker, um, but now you're seeing more regulation on that too.
• 19:19
  SPEAKER_02: Uh just from what I'm seeing.
• 19:21
  SPEAKER_02: But um yeah, I mean it it is it is it and it does it does help you uh get power um uh you know possibly quicker, possibly more power, um, especially if you're looking at places like Texas with a lot of gas.
• 19:41
  SPEAKER_02: So Yeah.
• 19:42
  SPEAKER_01: Well, there's a difference between a little gas and a lot.
• 19:45
  SPEAKER_01: You know, g uh Texas has a lot of gas, you know.
• 19:48
  SPEAKER_01: Um I have an oil well out in West Texas that hit a lot of gas, and it's just like, you know, but a lot of them it's not enough to really make a difference and may serve as some sort of generation, but not going to be your main source of energy.
• 20:03
  SPEAKER_01: Like you said, it's usually enough to get started and not enough to fuel the whole thing.
• 20:09
  SPEAKER_02: So Yeah, I mean there's a there's a lot that will they'll fuel it, but still some of the business plans are still going to um at least what we're seeing, still going to connect to the grid at some point.
• 20:22
  SPEAKER_02: Right?
• 20:23
  SPEAKER_02: The grid the grid was just this long, and if they could they could get plugged in quicker by standing up their own uh power plant gas fired, it's quicker.
• 20:35
  SPEAKER_02: There and there's solutions coming out now, uh fired by gas that um some of these power blocks are pretty darn amazing.
• 20:43
  SPEAKER_02: They're not cheap, but they're quick.
• 20:46
  SPEAKER_02: And I do think you're gonna see a lot of people using that with natural gas.
• 20:50
  SPEAKER_02: I mean the grid needs to be upgraded.
• 20:53
  SPEAKER_02: You know, we we're we were upgrading the grid.
• 20:57
  SPEAKER_02: Um we were doubling the size of the grid every 10 years through the 70s and and then we've stopped.
• 21:03
  SPEAKER_02: And China's been doubling their grid.
• 21:06
  SPEAKER_02: Um and we're just behind.
• 21:09
  SPEAKER_02: Uh you know, you know, if you if you look at what PJM is going through and you you look at uh out in California, I mean I mean everywhere the grid we're we're behind in getting it upgraded.
• 21:22
  SPEAKER_02: Uh you look around here in North Carolina, everything that Dude's doing to try to get um the grid and the wires upgraded, uh they're they're racing, but they're they're behind the behind the um pay ball a little bit.
• 21:37
  SPEAKER_01: So um do you see a lot of these um developers building up higher?
• 21:43
  SPEAKER_01: You know, I know we've talked about that quite a bit.
• 21:45
  SPEAKER_01: It's like, you know, at one point, you know, if you look at when XAI's Colossus went into Memphis, it was like on seven hundred acres, and everybody was looking for three, four, five hundred acres.
• 21:56
  SPEAKER_01: And now you're seeing companies literally.
• 22:02
  SPEAKER_01: I mean, how do you see that playing out?
• 22:04
  SPEAKER_01: You know?
• 22:11
  SPEAKER_01: When it's not a constraint, they'll build out?
• 22:13
  SPEAKER_01: I mean, I don't know.
• 22:14
  SPEAKER_02: Well, that that's a good question.
• 22:16
  SPEAKER_02: If there's already a lot of a lot.
• 22:20
  SPEAKER_02: There's already data centers in downtown that are in high rises.
• 22:24
  SPEAKER_02: That's they've been around forever, right?
• 22:26
  SPEAKER_02: Data centers been around.
• 22:30
  SPEAKER_02: I think the first one was late 40s, early 50s, and that was IBM in a room.
• 22:38
  SPEAKER_02: But but yeah, I mean for for the edge data centers, they were already going up already in some of those uh in in the high rises in the in the cities where they needed to be because you needed that latency, right?
• 22:57
  SPEAKER_02: Um so um you're talking about peop um some of the bigger companies buying smaller sites and going more vertical um than horizontal and trying to get the same amount of compute.
• 23:14
  SPEAKER_02: I I think you're gonna try to see that.
• 23:16
  SPEAKER_02: You still have uh, you know, depending on what the UDO is in the And I think it matters on your zoning.
• 23:22
  SPEAKER_02: I mean, uh you know, you're not gonna be able to go um super high on on like some of the sites that we have um that we have listed that heavy industrial, you you're not gonna you can't go four stories.
• 23:34
  SPEAKER_02: It's not zoned for it.
• 23:36
  SPEAKER_02: So um yeah, you know, it's so you you're gonna have to look at uh once again where it fits.
• 23:43
  SPEAKER_02: Are you gonna try to buy a 45-acre parcel in the country and and now you're gonna get you're gonna go up as opposed to out, and now you got this huge building?
• 23:55
  SPEAKER_02: I don't think that's gonna be allowed.
• 23:57
  SPEAKER_02: You are seeing that um on some of the some of the edge, uh, not even edge, but closer to the core.
• 24:07
  SPEAKER_02: I mean that people are going trying to go up a little.
• 24:10
  SPEAKER_02: And it depends on on your zoning, um, what you what the like I said, what what the ordinance allows on your height.
• 24:20
  SPEAKER_02: And uh there are people trying to go up, but you you might be going up two or three stories, but that gets expensive too.
• 24:27
  SPEAKER_01: Yeah, the amount of reinforcements you need, because those racks are really heavy.
• 24:30
  SPEAKER_01: It's not like it's a cheap building to build.
• 24:33
  SPEAKER_01: You know, you're not building little cheap apartments with a wood frame, you know.
• 24:38
  SPEAKER_01: It's um, you know, has to hold the racks and all that.
• 24:41
  SPEAKER_02: So well, you still need your backup power.
• 24:44
  SPEAKER_02: You still need your backup power, right?
• 24:46
  SPEAKER_02: Um your generators, they take up uh a lot of the room on the site.
• 24:51
  SPEAKER_02: So um, and you you still need um you've got to make sure you've got the place uh the space for cooling.
• 24:58
  SPEAKER_02: So when you try to do your test fits on smaller sites, uh inevitably you're gonna try to go up like we'd look at doing a site that we went up, I think we were looking at three stories of the it fit, but but we we haven't um we haven't done a deep dive on the feasibility on on the cost that that that's being rounded.
• 25:21
  SPEAKER_02: Right.
• 25:21
  SPEAKER_01: No, it's just interesting to see it kind of play out.
• 25:24
  SPEAKER_01: I think it's um, you know, you'll see them build up where the powers like, hey, they found power and there's not a lot of room but to go up.
• 25:33
  SPEAKER_01: I think you'll see situations like that where they do definitely go to three, four stories.
• 25:38
  SPEAKER_01: But I think for the most part, you know, having more space is is fine.
• 25:44
  SPEAKER_02: Well, I I don't think I think what you found out is you don't need a thousand acres.
• 25:48
  SPEAKER_02: That that's uh it's getting efficient.
• 25:51
  SPEAKER_02: You can you can do it in a lot less space.
• 25:53
  SPEAKER_02: That's already happened.
• 25:54
  SPEAKER_02: Um some of these big mega campuses where you had two, you know, a thousand, fifteen hundred, eight hundred, nine hundred acres, um, you know, there was a reason for that.
• 26:04
  SPEAKER_02: And and uh and they're finding that and we're finding that you don't need as big a sites depending on on where you are.
• 26:14
  SPEAKER_02: Um you can you still it can be more efficient.
• 26:18
  SPEAKER_01: So less than a hundred uh meg a hundred acres with fifty megawatts is a really good site or even twenty megawatts, right?
• 26:25
  SPEAKER_02: Well, if you've got power, that changes everything, right?
• 26:28
  SPEAKER_02: Right now it's power.
• 26:29
  SPEAKER_02: Um if you've got land with power, yeah.
• 26:32
  SPEAKER_02: I mean anthropic is inside it.
• 26:36
  SPEAKER_02: So uh and and you've got fifty megawatts is a lot of power.
• 26:40
  SPEAKER_02: We forget about that, you know.
• 26:41
  SPEAKER_02: We forget uh uh, you know, uh you know, I need a gigawatt.
• 26:45
  SPEAKER_02: You but you don't ever hit a gigawatt right away?
• 26:49
  SPEAKER_02: No, not not to start.
• 26:51
  SPEAKER_02: You can scale and get to the gigawatt, and they're not gonna generally get there right away anyway.
• 26:56
  SPEAKER_01: Yeah, there's literally companies with racks of you know, the neo clouds, they need to place them like right now.
• 27:02
  SPEAKER_01: You know, they need like five megawatts, not a hundred.
• 27:05
  SPEAKER_01: Well, they need a hundred, but you know, they take five at a site, so you know, to get started and start some.
• 27:11
  SPEAKER_01: Yeah, yeah.
• 27:12
  SPEAKER_02: And and you've got Amazon's got, I mean, uh they've got racks in storage because they didn't have the power to plug them in.
• 27:19
  SPEAKER_02: Even in uh AWS couldn't get them plugged in on some of their warehouses where they had space.
• 27:25
  SPEAKER_02: They didn't have power.
• 27:27
  SPEAKER_02: So, I mean, they've in August alone they took five billion dollar delivery of of uh racks from Nvidia.
• 27:35
  SPEAKER_02: So um they're sitting in warehouse waiting to get plugged in.
• 27:39
  SPEAKER_02: And then then you've got power commitment.
• 27:42
  SPEAKER_02: Um, I think Amazon has a whole dashboard on on their uh let me look at my notes, uh power resource on their use it or lose it uh dashboard that they might have power committed, but that they can't get it connected, they lose it.
• 27:59
  SPEAKER_02: So pretty big deal.
• 28:01
  SPEAKER_01: Let's talk about sites.
• 28:02
  SPEAKER_01: Um Memphis is available.
• 28:05
  SPEAKER_01: Um do you want to talk about that?
• 28:06
  SPEAKER_02: Or yeah, I mean we we can we can talk about it.
• 28:10
  SPEAKER_02: It's it's a really good site.
• 28:12
  SPEAKER_02: I think you know, right now with what's going on in Memphis and um in Shelby County, uh you know the that site was um with the zoning, the heavy industrial zoning, um data center was a use by right.
• 28:31
  SPEAKER_02: But a couple things have come into play that make that a a little bit um we're not gonna get the power there that we thought we were we were hoping to do 150 gigawatts there, build a substation.
• 28:43
  SPEAKER_02: Not to say somebody won't, but with TBA's new uh$1.52 million per megawatt fee, it it makes it tough on that site.
• 28:52
  SPEAKER_02: It's a 49-acre site.
• 28:54
  SPEAKER_02: It's a terrific site, I think, with we have current power on it right now.
• 28:59
  SPEAKER_02: Um four and a half megawatts there.
• 29:03
  SPEAKER_02: We do have a path to start.
• 29:07
  SPEAKER_02: We do, and that's that's there today.
• 29:10
  SPEAKER_02: We do have a couple substations on site, and then we do we do have a path to power.
• 29:16
  SPEAKER_02: We have nine parcels there.
• 29:18
  SPEAKER_02: So um it it it's interesting.
• 29:21
  SPEAKER_02: The fiber is terrific on that site, uh right in the middle of the Memphis fiber ring.
• 29:27
  SPEAKER_02: We did a study on that fiber, it's terrific fiber.
• 29:31
  SPEAKER_02: So uh I think that that site could be a mix um because it's a good industrial site.
• 29:37
  SPEAKER_02: Um and and it's great.
• 29:40
  SPEAKER_02: It's it'd be great for uh an edge type data center.
• 29:46
  SPEAKER_02: Um I agree.
• 29:47
  SPEAKER_02: Maybe maybe Colo um a little bit, but I mean we have we and then we have we do have buildings that could be retrofitted uh and create powered shells.
• 29:59
  SPEAKER_02: So looking into all of that right now.
• 30:02
  SPEAKER_02: And and you know, Memphis is gonna get there.
• 30:04
  SPEAKER_02: Um they've got 90 days of writing legislation now, and then 45 days to re review it.
• 30:12
  SPEAKER_02: So it's a hundred and thirty-five-day hold.
• 30:16
  SPEAKER_02: Uh um, but I I do think that they're gonna just create guidelines on how these go in.
• 30:21
  SPEAKER_02: The the big concern, you know, one of the bigger concerns there is the was the air quality, and and Elon didn't do any favors for data center developers when he just um brought his gap turbines from Europe and fired it up.
• 30:39
  SPEAKER_02: So um kind of put people but but God bless him for doing it, man.
• 30:45
  SPEAKER_02: That guy just rolling rats in the old electrolex factory.
• 30:52
  SPEAKER_01: Yeah, so our site's just kind of a few miles away from that.
• 30:57
  SPEAKER_01: Still it's it's a great site, you know, and regulations changing everywhere, but you have stuff that's moving ready right now.
• 31:04
  SPEAKER_01: And it's you know, the four and a half can get somebody started.
• 31:07
  SPEAKER_02: So well, yeah, you it gets somebody started and and really 135 days, man, you're gonna be in uh planning, they're not gonna look at any applications, right?
• 31:17
  SPEAKER_02: Uh through them, but yeah, but really you can get a lot of due diligence done in the site.
• 31:22
  SPEAKER_02: I mean, you've got iOS that it's a great uh great use there.
• 31:28
  SPEAKER_02: Um if if you needed some cold storage, terrific use.
• 31:31
  SPEAKER_02: I mean, we've got two spurs there.
• 31:34
  SPEAKER_02: Old chemical plant's gonna be cleaned up, um remediated, delivered flat, delivered clean.
• 31:41
  SPEAKER_02: Uh I I love the site.
• 31:43
  SPEAKER_02: Um but I you know I walk those old sites.
• 31:46
  SPEAKER_02: I'm a dirt dog, so you I walked those old industrial sites, and I'm like, man, I love this.
• 31:52
  SPEAKER_02: Uh I always just kind of see what it could be.
• 31:57
  SPEAKER_02: I mean, really, we we actually I had somebody looking at me and they're like, what?
• 32:00
  SPEAKER_02: This taste is a mess.
• 32:02
  SPEAKER_02: I'm like, I love it.
• 32:03
  SPEAKER_02: This is awesome.
• 32:04
  SPEAKER_02: Oh man.
• 32:05
  SPEAKER_01: Dude, you had me uh freaked out.
• 32:07
  SPEAKER_01: I took my drone out there and you're like, don't take a picture with your phone next to the substation.
• 32:13
  SPEAKER_01: So I started flying my drone, and I'm like, am I gonna get electric kid and just want to be?
• 32:19
  SPEAKER_02: I don't know.
• 32:20
  SPEAKER_02: You don't want to be too close to the substation like you.
• 32:25
  SPEAKER_01: I'm like, is my hair gonna catch on fire?
• 32:26
  SPEAKER_01: Well, I don't have any hair, but you know, catch on fire.
• 32:29
  SPEAKER_02: You think we're safe there?
• 32:32
  SPEAKER_02: Um no, that was just a safety tip though.
• 32:38
  SPEAKER_01: Yeah.
• 32:38
  SPEAKER_02: Um, just a shout out, you have a much larger Illinois site um, you know, that you're working on we have uh old power plant um on the Mississippi River old coal power plant um that converted to gas in 2000, uh being dismantled right now.
• 32:59
  SPEAKER_02: We've got um our client um sold 40 acres.
• 33:04
  SPEAKER_02: Uh the the substation was right at the power plant, and that's gonna be one of the better sites to uh possibly put some of the data center buildings, but um got two new substations going in.
• 33:17
  SPEAKER_02: We've got terrific gas because that was a gas fire power plant all on site.
• 33:23
  SPEAKER_02: We have community support.
• 33:25
  SPEAKER_02: The community actually doesn't want it, they actually need it.
• 33:28
  SPEAKER_02: Um the power plant was one of the bigger um tax uh revenue and property tax revenue in um in that county, and uh it's created a pretty big hole.
• 33:42
  SPEAKER_02: So it would be um uh a terrific boost to the county, to that town.
• 33:48
  SPEAKER_02: Yeah.
• 33:49
  SPEAKER_02: You know, uh just like anything else, there's some hair on there's some hair on it.
• 33:53
  SPEAKER_02: Um, but it can be small.
• 33:55
  SPEAKER_01: Things can be they can be small that's that's the perfect place for a data center because the power's already in place.
• 34:02
  SPEAKER_01: You're not gonna, you know, kill everybody's electric bill and all that.
• 34:07
  SPEAKER_01: So and they need the they need the tax base to you know make money off of.
• 34:14
  SPEAKER_02: And even if the construction jobs will be massive, uh we have another 160 acres under option, so it could be 460.
• 34:22
  SPEAKER_02: There's actually more we could pick up uh to the north uh of the site, um behind the meter there, natural gas that isn't Illinois, but there is there is a path to get that um started.
• 34:35
  SPEAKER_02: Like I said, we're looking at some of these power blocks.
• 34:38
  SPEAKER_02: But for somebody, it's a terrific, it's a terrific site, and hopefully it would be fairly fairly quick on getting through.
• 34:50
  SPEAKER_02: Now, you know, you gotta take that with a grain of salt because what does fairly quick mean when you're getting the entitlement and the approval, but a lot quicker than it was.
• 35:00
  SPEAKER_02: We do have some headroom on the on the grid there, and there is another data center proposal now a hundred miles away, which is good news, um, I think, um, because it it's showing that it's moving into that southern Illinois, and um we get proof of concept, we get another data center there.
• 35:20
  SPEAKER_02: We get we get the um Amaron lines upgraded.
• 35:24
  SPEAKER_02: Uh we have to do a little bit of upgrades.
• 35:26
  SPEAKER_02: I think we have about 21 million in in uh line upgrades that need to be done for the site, but we have some headroom there.
• 35:33
  SPEAKER_02: Um the old uh power plant was 647 megawatt gas-fired power power plant.
• 35:41
  SPEAKER_02: Um, the air rights should uh should be good.
• 35:44
  SPEAKER_02: We're uh in a non-attained area, so um, and we have community support.
• 35:50
  SPEAKER_02: Uh the site has a lot going for it uh for the right buyer.
• 35:55
  SPEAKER_02: We're finally just bringing that to um to the market publicly.
• 36:01
  SPEAKER_02: Um this week or the first of next week, we'll start marketing it and then putting it out called.
• 36:08
  SPEAKER_01: Awesome.
• 36:09
  SPEAKER_01: You know, it's most people don't realize the process and everything, getting these things to where you can market them because there's so many details that you have to sort out.
• 36:19
  SPEAKER_01: Um I just have uh I got a listing in Kentucky.
• 36:24
  SPEAKER_01: Um it's gonna be NDA, um some powered land with uh gas behind the meter, um, you know, uh substation um basically on on the property or right there with you know, so it it it looks like it could could be a good one.
• 36:43
  SPEAKER_02: So, you know, um I know you're under NDA, but good location where you think community remember community is one of the bigger things you're gonna need to solve, it's better to solve it up front, right?
• 36:56
  SPEAKER_02: You think you yeah, you'll have that wherever's buy-in?
• 36:59
  SPEAKER_01: Yeah.
• 37:00
  SPEAKER_01: Yeah, I think it'll um yeah.
• 37:03
  SPEAKER_01: I think they'll definitely definitely be open to it.
• 37:06
  SPEAKER_01: So I'm excited about that.
• 37:08
  SPEAKER_01: And then um I think I have one coming available in Mexico.
• 37:14
  SPEAKER_02: Mexico, that's what I wanted to talk about.
• 37:16
  SPEAKER_02: That's awesome.
• 37:18
  SPEAKER_01: Well, well, we did they sent Yeah, they sent the listing agreement back um with some corrections, and you know, we're that's where that's where we're at.
• 37:28
  SPEAKER_01: But it's got a solar farm, uh, 500 uh acres has solar going into it.
• 37:34
  SPEAKER_01: So there's gonna be some power from that substation on the um edge of the property.
• 37:40
  SPEAKER_01: Um friendly government, open to uh grid upgrades and stuff like that.
• 37:46
  SPEAKER_01: You have fiber that's you know not too terribly far away.
• 37:52
  SPEAKER_01: So I I'm still in the process on that.
• 37:54
  SPEAKER_01: But you know, as far as affordability and access, it'll be a pretty decent site, I think.
• 38:00
  SPEAKER_01: So anyway, um excited, excited to explore it and um see where it goes.
• 38:07
  SPEAKER_02: And I think uh it's gonna be a winning people get yeah, seeing if if people get comfortable, I I know that Amazon, Google, and Microsoft are um building some big um plants in Mexico.
• 38:21
  SPEAKER_02: So there are already four some big data centers, I mean not plants.
• 38:26
  SPEAKER_01: Yeah.
• 38:26
  SPEAKER_02: So yeah, looking for I think it helps you get through the regulatory and you're gonna have community support there, depending on your location and the comfort level you can get the develop where you can get the developer and the ins, you know, how they ensure it's insure it and keep it safe.
• 38:44
  SPEAKER_01: Yeah, I got a couple others that I'm working on.
• 38:46
  SPEAKER_01: You know, they're kind of on the back burner, but hoping to get those uh, you know, you know how it is.
• 38:52
  SPEAKER_01: It takes a couple months to get it live and bring it to fruition.
• 38:56
  SPEAKER_01: So anyway.
• 38:58
  SPEAKER_02: It's a lot of work and there's a lot of people running around in the space.
• 39:02
  SPEAKER_02: Um there's no um lack of people pitching you sites every day, um, you know, and and no lack of people pricing their sites uh as if they were powered land when they're not yet.
• 39:19
  SPEAKER_02: Powered land.
• 39:21
  SPEAKER_01: They're not yet.
• 39:22
  SPEAKER_01: They're not yet.
• 39:23
  SPEAKER_01: They could be.
• 39:24
  SPEAKER_01: Yeah, but if you want powered land, if you want powered land, what do you do?
• 39:28
  SPEAKER_01: An auctions contract, right?
• 39:30
  SPEAKER_01: I mean, you know.
• 39:32
  SPEAKER_02: Well, uh no, I I'm talking about uh pricing them as if they were powered land and they're not yet.
• 39:39
  SPEAKER_02: Um it's like, wow, um you guys uh pricing this like you've got it solved and it's not.
• 39:47
  SPEAKER_02: You know, you're you're chart you're charging the premium per acre and we're not there yet.
• 39:52
  SPEAKER_02: So all I was thinking was a point that there's a lot of that happening.
• 39:56
  SPEAKER_01: Oh, I know.
• 39:57
  SPEAKER_01: Well, it's it it there's gotta there's gotta at least be a clear path to the power, in my opinion, you know, if you want the premium, you know.
• 40:06
  SPEAKER_01: Um so right.
• 40:09
  SPEAKER_02: You know, um I think that a lot of people are thinking because land is just such a small piece of the whole data center build-out that they can go ahead and just price price it at whatever they want.
• 40:20
  SPEAKER_02: And that's not true.
• 40:22
  SPEAKER_02: I mean, it's still it's still needs to make sense um at the at the end of the day.
• 40:29
  SPEAKER_02: Um and it if we have to start from zero with the power, then why why should we pay the premium?
• 40:37
  SPEAKER_01: I don't disagree.
• 40:38
  SPEAKER_01: Yeah, there's got to be some sort of power or very quick path to it or or confirmation period, you know.
• 40:44
  SPEAKER_01: Um but yeah, I there's a lot of that, you know, and then there's a lot of uh landowners approaching companies or developers approaching them, taking advantage of them too.
• 40:54
  SPEAKER_01: So there's that the other side, you know, where there's some of that going on, or people locking up properties with no intention of ever really buying it.
• 41:02
  SPEAKER_01: So, you know, that's always kind of been a game in real estate on both sides of the fence.
• 41:07
  SPEAKER_02: That's that yeah.
• 41:08
  SPEAKER_02: Um land developers doing that for years and years.
• 41:12
  SPEAKER_02: Some of them are terrific at it.
• 41:13
  SPEAKER_02: They'll tie up the property with options, get it entitled, either either flip it entitled uh or um sell it, uh sell their options.
• 41:24
  SPEAKER_02: Uh the thing is what we have in this space right now is more like the oil boom, a lot of wildcatters, a lot of people um in there uh seeing seeing the get rich quick.
• 41:38
  SPEAKER_02: And um, you know, some guy some guys have hit it, and and some you only need one well to hit, right?
• 41:44
  SPEAKER_02: So you're you've got it, you've got well.
• 41:46
  SPEAKER_02: Um and they tie up and clog up the queue.
• 41:49
  SPEAKER_02: I I think I've I've voiced my frustration on that on LinkedIn.
• 41:55
  SPEAKER_02: Um, I think Abbott, that's one of the main reasons.
• 41:58
  SPEAKER_02: It's not one of the main.
• 41:59
  SPEAKER_02: I mean, they had um uh the the amount of uh requests in the queue was ridiculous, and it's like we gotta find out who's swimming naked, who's real and who's not.
• 42:12
  SPEAKER_02: And that is that is yeah, that is that is starting to um weed out.
• 42:20
  SPEAKER_02: And then uh, you know, a great article in Business Insider on the the Bragawatts are are hurting um people with real megawatts.
• 42:28
  SPEAKER_02: And the Bragawatts um people announcing uh a lot of capacity trying to get funding um and trying trying to um uh stir up some backing.
• 42:40
  SPEAKER_02: It doesn't necessarily I I understand what they're doing, I understand when they want to announce a project, but it it hasn't been helpful on community support.
• 42:49
  SPEAKER_02: You've got you know, you've got uh, you know, I forget uh we think there's about 500 gigs um um announced, and I think about 170 is what they're saying will get get built.
• 43:05
  SPEAKER_02: Um so we'll we'll see.
• 43:08
  SPEAKER_02: But the the um that that I think it's is starting to sip its way through.
• 43:15
  SPEAKER_02: Um construction cost, interest rates, oil, um all of that affects where we are, it affects what we're working.
• 43:23
  SPEAKER_02: I mean demand's not slowing down, demand's not going anywhere, so that's why we still have uh um people really pursuing this hard.
• 43:33
  SPEAKER_02: Yeah.
• 43:34
  SPEAKER_02: People talk about people talk about a bubble.
• 43:37
  SPEAKER_02: We're the worst in um in this country at predicting bubbles.
• 43:42
  SPEAKER_02: Um we we just are.
• 43:46
  SPEAKER_02: We're not we're not good at predicting.
• 43:48
  SPEAKER_02: Uh I mean look at our track record, go all the way back and start to look at the track record.
• 43:52
  SPEAKER_02: Yeah.
• 43:53
  SPEAKER_02: Um are we?
• 43:56
  SPEAKER_02: I I don't know.
• 43:57
  SPEAKER_02: Um predicted ten of the ten of the last and uh a lot of capital.
• 44:03
  SPEAKER_01: I predicted ten of the last three were sessions.
• 44:08
  SPEAKER_01: Uh something like that.
• 44:10
  SPEAKER_02: Ten of the last three, yeah.
• 44:12
  SPEAKER_01: Yeah.