00:00Data centers, the talk of the town, we know that that has made ripples across every sector, AI, and certainly in the real estate market as well.
00:08Talk to us about what you mean when you say that we could start to see new opportunities be crimped a little bit here.
00:15I think what's happening right now is power availability across the country is getting gobbled up by developers of data centers and other uses.
00:22And so, for example, you have systems which might produce today 50 gigawatts for their whole municipality and municipal area, and they have queues of 100 and 200 gigawatts of power requests coming in from data center operators.
00:36There's no way they have the infrastructure to meet these needs.
00:39We have not been building power generation in our country in terms of gas plants or nuclear plants or the type of power we need to come on.
00:46And so ultimately, you've got a major mismatch of supply and demand of power.
00:51And what many of the energy companies are now doing is they're going to developers of data centers and other real estate and saying, you might want that power.
00:59We need to make sure that your request for that is substantial, so we'd like you to put up huge deposits multiple years in advance.
01:06And that's starting right now.
01:08And those deposits can be as large as a million dollars per megawatt hour.
01:12And so, you know, it could be $200, $300, $400, $500 million for a new project.
01:15And that's beginning to creep its way in the marketplace.
01:18And that will, by itself, begin to restrict the supply of opportunity.
01:23It's fascinating, especially when you think about that supply and demand dynamic and the fact that, you know, when it comes to some of the power generation that hasn't been built, it's not like you can switch that overnight.
01:34But I'm curious to know, is there any moment in time that we can compare this to, this idea that you're seeing these huge deals signed years in advance?
01:42Have we seen something like this before?
01:44In the real estate industry, I have never seen a level of demand for an asset class and so much capital chasing one part of the marketplace.
01:54Now, to be clear, this is not real estate.
01:56This is the intersection of power, compute, and real estate.
02:00And if you've seen these largest facilities, we're now in an era of railroads and tunnels and bridges and huge public infrastructure projects.
02:10So this is a very different business than just a straight-up real estate business.
02:14Well, I am curious just about other sort of building that we've seen in the industrial space, outside of just data centers specifically, because it seems like there's been more activity there.
02:22I guess my question to you is, are you seeing that activity?
02:24Or I say, are you investing in that activity?
02:26We have, through our activities as a real estate developer in the United States, we have come across land that has proven itself to be very valuable, as opposed to our company did not design itself to be a data center development company.
02:39But we have come into that business because of the land holdings that we've had and just the highest and best use for that land.
02:46So, yeah, it's come at us.
02:47It's an attractive part of the business.
02:48Where are we going to see more of that industrial, in terms of the types of sectors, that industrial capacity that comes online, in terms of the land use?
02:56Where is that going?
02:57Like, who's basically using that stuff?
02:59Well, I think for data centers or for more generally?
03:01Just overall.
03:02Just overall.
03:03Yeah, not just data centers.
03:03Look, I think what we're seeing in America and continue to see, generally speaking, not entirely, but towards the Sun Belt, where America's manufacturing base is being rebuilt today.
03:11Just today, we're talking about a zinc smelter for $7 billion being built, I think, in Tennessee.
03:16And you're watching, whether it's Arizona, whether it's Texas, whether it's Georgia, whether it's South Carolina, this is where the new manufacturing infrastructure for the United States in the 21st century is being built.
03:28And ultimately, that creates tremendous demand for real estate around those facilities.
03:32Yeah.
03:32And that is our backyard, so we're excited about it.
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