Project Overview
Our mission is clear: to deliver a state-of-the-art data infrastructure solution that meets present needs while also forging a path towards a sustainable future.
EcoLogic Data Solutions, is a cutting-edge data center initiative crafted to align seamlessly with the demands of the digital age. Precision-engineered to cater specifically to the demands of generative AI tasks, our establishment epitomizes innovation and dependability. Our 120MW Temple Colocation Data Center, is designed to meet the highest standards of reliability and efficiency.
Diverging from conventional data centers that often remain disconnected from their surroundings, EcoLogic Data Center stands apart by actively engaging with the local community through a spirit of partnership and environmental stewardship. In addition to this commitment, our initiative extends further to encompass the creation of a meticulously designed and fully amenitized community park, integrated seamlessly within our infrastructure. This EcoLogic community park not only serves as a verdant sanctuary for local residents but also plays a crucial role in fostering biodiversity and promoting ecological balance within the region.
Market
Overall Market Trend
Over the past decade, the data center industry has witnessed rapid expansion, driven by the growing necessity for cloud services and the widespread use of internet-connected devices worldwide. As we enter 2024, the data center market is marked by a discernible trend towards heightened demand and innovation, spurred by factors such as the escalating volume of data generated by IoT devices, the integration of AI and machine learning technologies, and the emergence of edge computing (JLL Data Center 2024 Global Outlook).
Traditionally, data centers primarily featured CPU servers, with GPU processing considered optional. However, as generative AI becomes more accessible, the demand for AI training services has surged, leading to a corresponding increase in the need for GPU-centric data centers.
In 2023, the worldwide data center colocation market size soared to roughly USD 66.31 billion. Forecasts indicate a robust growth trajectory, with a projected compound annual growth rate (CAGR) of 14.5% from 2024 to 2032. By 2032, the market is anticipated to achieve a valuation of approximately USD 221.88 billion.
Dallas Market
The Dallas data center market is a pivotal player in North America, strategically situated between two major hubs in the United States: Northern Virginia and Silicon Valley. With a robust network spanning more than 150 data centers, Dallas presents a compelling array of benefits. Its central positioning, alongside the most competitive real estate prices among primary U.S. data center markets and power costs significantly below the national average, combined with access to a plentiful pool of skilled IT professionals, makes it an irresistible choice for data center businesses.
In 2023 H2, according to CBRE Data Center Solution, H2 2023, the Dallas market claimed an impressive 10.9% share of the US market, securing the second position nationwide. With a low vacancy rate of 1.8% and high absorption rate of 6.5 MW, the market demonstrates robust performance (Figure 1.). However, due to escalating demand for data center services and fierce competition for large land parcels from logistics centers, available land at reasonable prices is becoming scarce. Consequently, developers are increasingly turning their attention to southern Dallas, seeking viable opportunities to meet the growing demand while navigating land constraints.
Rental rates across all requirement sizes are on an upward trajectory, driven by limited supply and robust demand in the data center market. In 2023, pricing for 250-to -500-kW requirements saw a projected 16% year-over-year increase, indicating the market's bullish momentum. Anticipate further price hikes in 2024, with expectations of another 10% to 15% increase. These trends are fueled by ongoing supply constraints and sustained high demand across all market segments (Figure 2.)
In conclusion, the Dallas data center market emerges as a powerhouse in North America, attracting businesses with its strategic location, competitive real estate prices, and favorable power costs. Despite its strong performance and high demand, hurdles like limited land availability and rising rental rates endure. As demand continues to outpace supply, expansion southward becomes increasingly unavoidable.
Figure 1. Dallas Market Vacancy Rate and Absorption rate, CBRE Data Center Solution, H2 2023 Figure 2. Average Asking Rental Rate with Y-O-Y change for primary Market CBRE Data Center Solution, H2 2023Located at 3426 Nugent Ave in Temple, TX 76504, this expansive property spans 26.96 acres and is currently listed at $3,523,394 USD. Temple, TX, nestled in the heart of Central Texas within Bell County, enjoys a strategic location along Interstate 35, offering easy access to both Austin and Dallas, each within a 2.5-hour drive.
The property's proximity to the Temple Industrial Park enhances its appeal for industrial and commercial ventures, providing convenient access to a wide range of amenities crucial for business operations. Additionally, its adjacency to META's Hyperscale Data Center lays a strong foundation with essential infrastructure in place, further amplifying its allure and potential for diverse development opportunities.
Presently zoned as agricultural land, akin to META's existing hyperscale data center site, a zoning adjustment tailored to accommodate the intended purpose of this site is imperative for future utilization. Environmental Site Assessment Phase 1 has been completed, with no need for Phase 2, indicating the absence of endangered species and completion of archaeological investigations. Moreover, compliance with the Municipal Separate Storm Sewer System has been achieved, with the only outstanding requirement being the wetland delineation. We have conducted an integrated plan as part of our sustainability initiatives to address these potential issues.
A comprehensive climate risk assessment indicates a moderate overall risk level, highlighting potential issues related to floods and heat in the area. Specifically, Temple experiences consistently higher temperatures exceeding 80 degrees Fahrenheit from May to October. Addressing the cooling needs for both servers and facilities during this period presents a significant challenge, potentially leading to substantial energy costs over time.
Figure 5. Site Climate Risk and Environmental Site Assessment
Figure 6 Temple Climate Graph
While the northwest corner falls within the 100-year flood zone, the majority of the site remains unaffected by flood risks, presenting a promising opportunity for development.
Site Topography
The site rises in eleva�on at its center, slopes downward toward the southeast, and reaches its lowest point in the northwest, which is most vulnerable to the impact of a 100-year flood. Presently, the area is covered with woodland plants boas�ng robust root systems that help retain soil and water. Our plan is to maintain this ecosystem while also introducing addi�onal na�ve wetland plants and ground cover. This will enhance the area's capacity to manage increased stormwater runoff and safeguard local biodiversity.
Project Team
Figure 7. Site Topography & Elevation. Google Earth
Figure 8. Project Team and Examples
Our team comprises esteemed industry leaders across various disciplines, including architecture, construction, electrical infrastructure, and legal representation. Sheehan Nagle Hartray Architects brings a wealth of experience in pioneering data center projects throughout Dallas and the broader United States. Notable examples of their work include the Meta and Google data center projects in Texas and Arizona, showcasing their expertise and innovative approach.
DPR Construction is renowned for its successful delivery of data center projects, with a strong focus on sustainability. The majority of their projects are LEED certified, aligning perfectly with our commitment to sustainable initiatives. Their track record in sustainable construction will undoubtedly bolster our efforts in this regard.
Rosendin Electric, a trusted partner, specializes in energy infrastructure critical for both data center operations and site functionality. With extensive experience collaborating with major tech companies in the region, they bring invaluable expertise to our team, ensuring the seamless integration of electrical systems within our facilities.
Recognizing the significance of navigating potential rezoning issues, we have enlisted Marrs Ellis & Hodge as our legal counsel. Their expertise ensures adept management of any political interactions or land use challenges that may arise, providing comprehensive support to our project from a legal perspective.
Site Master Plan
Figure 9. Site Master Plan
Design & Planning
The EcoLogic data center is an innovative colocation facility featuring a two-story design with a remarkable 1,315,303 square feet of rentable space. Complementing this impressive structure is an expansive 1,644,129 square feet of green space, meticulously integrated to foster a sustainable and environmentally friendly environment. Our facility is equipped with a plethora of indoor and outdoor amenities, catering to the diverse needs of our clientele. Furthermore, we boast advanced uninterrupted power supply (UPS) systems, ensuring seamless operations and maximum reliability for our clients. Stay ahead of the curve with our cutting-edge infrastructure and the latest technologies, setting the standard for excellence in the data center industry.
In our holistic site planning approach, we leverage the natural topography to its fullest potential. By strategically locating the park and wetland retention pond system in the northwest corner where the topography naturally dips, we optimize space utilization while enhancing the site's environmental functionality. Meanwhile, critical data center mechanical spaces and server areas are positioned at the center towards the southeast end, ensuring efficient operations and maximizing accessibility. This thoughtful arrangement not only capitalizes on the site's inherent features but also reinforces our commitment to sustainability and operational efficiency.
Our data center emphasizing resilient infrastructure and top-tier computing prowess, we assure unparalleled efficiency and dependability for the most sophisticated AI endeavors. Certified as Tier III, it boasts dual redundancy for both power and cooling equipment, ensuring uninterrupted operations. Supported by an impressive array of 63,938 onsite solar panels generating 400W each and backed by 60 2000KW onsite generators, our facility guarantees robust power supply even in the most demanding scenarios. With 480 units hosting 250kWh servers, including 180 retail and 300 wholesale, we provide flexible options to suit diverse needs. What sets us apart is our readiness for GPU-AI training, powered by NVIDIA H200 Tensor Core GPU, making us an ideal choice for handling generative AI workloads with ease and efficiency.
The AI-Ready Data Center Figure 10. Data Center Layout
Retail and wholesale data centers will be situated in distinct sections of the building, with retail operations housed in the east wing and wholesale operations in the west wing. Each wing will feature dedicated entrances and comprehensive sets of equipment and amenities tailored to their respective needs. Upon entering the facility through the lobby, which doubles as a communal social area for IT professionals, visitors will proceed through stringent security protocols, including a mantrap, before reaching the operations room. This room serves as the nerve center for 24/7 data center activities, where vigilant monitoring ensures the frontline defense of data security.
Past the operation room, you'll find the office space, or the data server tech support. In the retail section, companies will share communal office areas and amenities for their onsite IT technicians. Meanwhile, within the wholesale sector, each tenant will have their own dedicated office space, customized to their unique requirements and preferences.
Next to the office space is the data hall, the heart of the data center, housing the most critical infrastructure for data processing, distribution and storage. Here, cutting-edge fire protection and cooling technologies ensure the safety and optimal performance of our servers. Our data center employs advanced fire suppression systems, including inert gas suppression and pre-action sprinkler systems, to swiftly detect and extinguish any potential fires while minimizing damage to equipment. Clean agent systems use gases that extinguish the fire without leaving residue, making them ideal for protecting sensitive electronic equipment. Inert gas systems reduce the oxygen level in the room to suppress the fire. Mist systems use very fine water droplets to control the fire and reduce the amount of water used Additionally, state-of-the-art cooling technology, such as precision air conditioning units and hot aisle containment systems, maintains optimal temperature and humidity levels, preventing overheating and ensuring uninterrupted operation of our servers.
The data hall features an elevated floor design meticulously engineered to optimize wire management and maximize airflow, essential for precise temperature and humidity control. This innovative flooring system allows for seamless organization of cables and conduits, minimizing clutter and facilitating efficient maintenance and upgrades. Furthermore, strategically placed perforated floor tiles enhance airflow distribution, ensuring consistent cooling across the data hall. Combined with advanced temperature and humidity monitoring systems, this design ensures optimal conditions for equipment operation, mitigating the risk of overheating and maximizing the reliability and performance of our data center infrastructure.
Figure 11. EcoLogic Retail Data center layout
Adjacent to the existing residential area, our park offers multiple access points from the surrounding neighborhoods, fostering a sense of community and inclusivity. Positioned on the southwest side, it welcomes visitors with open arms, providing a serene and inviting space for recreation and relaxation. As you approach the data center, engineered topographic features, including a carefully crafted mountain adorned with preserved woodlands and lush vegetation, subtly obscure visual access. Concealed behind this natural barrier, fencing seamlessly integrates into the dense vegetation, ensuring that the data center harmoniously blends into the surrounding landscape and community ambiance. Provide security to our data center services while providing a
Figure 12 Data Center Hall Design Detail Community Park Figure 13. Community Parktranquil and aesthetically pleasing environment for our neighbors. This innovative approach not only prioritizes the protection of our infrastructure but also enhances the overall quality of life for the community. By seamlessly integrating the data center into its surroundings, we strive to be good stewards of both the environment and the neighborhood, creating a cohesive and sustainable ecosystem for all.
Security
There is one and only entrance to the data center to ensure its privacy and security, with six layers of security checkpoints beginning right at the security gate on W Nugent Ave, ensuring comprehensive protection from the perimeter to the data center floor.
Layer 1: Signage and Fencing
Signage and fencing serve as foundational elements of security, providing a visible deterrent to unauthorized access. At our data center, we prioritize this aspect with clear signage and sturdy fencing surrounding the facility, ensuring a secure perimeter.
Layer 2: Secure Perimeter
Within the secure perimeter, our data center employs advanced surveillance measures, including thermal cameras with overlapping fields of view. This comprehensive surveillance system enables us to monitor and track movements around the facility, backed by anti-climb fencing and vehicle crash barriers for added protection.
Layer 3: Building Access
Access to the building is tightly controlled, requiring authorization and thorough security checks. Our security checkpoints utilize RFID badges, biometric scanning, and vigilant security personnel to validate identities and access privileges. Multiple security checkpoints within the building further restrict access to sensitive areas.
Layer 4: Security Operations Center
Our Security Operations Center serves as the nerve center for monitoring and managing security systems. Here, sensor and camera data are meticulously monitored and integrated with on-site security teams, ensuring proactive threat detection and response.
Layer 5: Data Center Floor
Figure 14. Site Security DetailsAccess to the data center floor is strictly limited to authorized technicians and engineers with specific clearance levels. This stringent access control minimizes the risk of unauthorized tampering or access to sensitive infrastructure.
Layer 6: Secure Hard Drive Destruction
To safeguard data integrity, our data center includes a secure hard drive destruction facility. Drives earmarked for destruction are securely transferred to this facility via a two-way locker system, ensuring that only authorized personnel have access to the drive shredding room, thereby mitigating the risk of data breaches.
Sustainability
At the core of our data center beats a resolute commitment to sustainability, epitomized by our unwavering pursuit of the LEED v5 Gold standard. Our dedication extends beyond mere compliance; it's ingrained in every facet of our operations. Embracing renewable energy sources like on-site solar power and supplementary wind and solar energy procurement, we strive to redefine industry norms and set new benchmarks for ecoconsciousness.
But our sustainability journey doesn't stop there. We've meticulously woven eco-conscious features throughout our establishment, cultivating a thriving ecosystem that mirrors our commitment to environmental stewardship. From verdant communal green spaces to vibrant native plant-filled wetlands and purposeful bio-retention ponds, every element serves as a testament to our pledge to preserve and protect our planet.
Moreover, our data center stands as a beacon of innovation in sustainable design. Our cutting-edge cooling and stormwater management systems, meticulously crafted for maximum efficiency, exemplify our dedication to operational excellence. With a state-of-the-art evaporative cooling system tailored to meet the demanding needs of our data hall, we ensure optimal performance while minimizing energy consumption. Meanwhile, rainwater, harvested from our expansive roof surface, finds purpose anew as it's collected, stored, and recycled to fulfill diverse functions, from toilet flushing to landscape irrigation.
Through these concerted efforts, we not only strive to shrink our environmental footprint but also elevate the standards of excellence within our industry. Our commitment to sustainability isn't just a lofty ideal; it's a guiding principle that underscores every decision we make. As stewards of our planet, we embrace the responsibility to lead by example, ensuring that our practices adhere to the highest standards of environmental integrity.
Timing Assumptions
Given the time constraints inherent in data center development and the rapid pace of technological innovation within the industry, our predesign phase is strictly limited to six months. This ensures that we swiftly adapt to evolving requirements and integrate the latest advancements into our plans. Additionally, our construction period
Project Timeline Figure 15. Project Overall Timelineis capped at two years, ensuring timely execution of the project while maintaining alignment with industry standards and client expectations.
With our predesign and construction timelines clearly defined, we're strategically positioned to achieve our overarching goals. By stabilizing operations by year 4 and aiming to sell by year 8, we ensure a solid foundation for profitability and growth. This timelin e allows us to capitalize on market demand while delivering a product that meets the highest standards of quality and efficiency. Through careful planning and execution, we're confident in our ability to not only meet but exceed industry expectations, driving success for our stakeholders and clients alike.
Project Finance
Acquisi�on+ Development
The acquisi�on cost for our venture amounted to $3,601,862, reflec�ng a prudent investment decision bolstered by the accessibility of affordable land in the region. However, the journey towards establishing our data center has been marked by substan�al development costs, primarily atributed to the intricate construc�on of IT infrastructure and data center facili�es, alongside essen�al sitework aimed at for�fying our resilience against flood and water damage.
In total, our development endeavors incurred expenses totaling $1,184,386,428. While this figure may seem significant, it underscores our unwavering commitment to crea�ng a robust, future-proof infrastructure capable of mee�ng the evolving demands of the digital landscape. Through strategic investment and me�culous planning, we remain poised to deliver unparalleled reliability and performance, ensuring that our data center stands as a beacon of technological innova�on and opera�onal excellence.
We provide a comprehensive solu�on tailored to meet the diverse needs of our clients. For wholesale tenants, we offer 300 server units available for lease, catering specifically to 1-3 enterprise tenants, including major tech companies and large corpora�ons seeking AI training services. Our compe��ve pricing is set at $175 per kilowathour monthly, with contracts subject to annual renewal and a modest 3% rent growth per year.
In addi�on, we accommodate retail tenants with 180 units available for rent, with a minimum requirement of 10 units per user. Our flexible leasing terms, ranging from 6 to 12 months, are designed to cater to the dynamic needs of businesses, offering scalability and stability as priori�es. The monthly rate for retail tenants stands at $225 per kilowat-hour, ensuring affordability without compromising on quality or service.
Both wholesale and retail leases operate under a triple-net lease structure, providing transparency and accountability for all par�es involved. We an�cipate an ini�al vacancy rate of 4%, gradually increasing to 6% upon exit, allowing for realis�c projec�ons and effec�ve management of resources. With a focus on adaptability, reliability, and value, we strive to exceed expecta�ons and forge las�ng partnerships with our tenants.
Figure 18. Operating Cash Flow
Based on this assump�on, our projected annual pre-tax cash flow (PBTCF) stands at $310,753,820.06 in the ini�al year, escala�ng to $363,157,140.97 by the �me of our exit.
Figure 19 Sale Assumption Detail
With an exit capitaliza�on rate (CAP) es�mated at approximately 7%, our property is an�cipated to command a sale price of $4,914,104,014. This valua�on not only guarantees full cost recovery but also promises a substan�al return on investment.
Recognizing the substan�al development cost of $1,184,386,428, we acknowledge the necessity of securing financial partnerships to facilitate the construc�on process. In light of this, we have strategically formulated a financing plan that integrates both equity par�cipa�on and debt servicing.
Our approach entails ini�a�ng the project with a two-year construc�on loan, structured to accommodate a loan-tocost (LTC) ra�o of 70% and bearing an interest rate of 5.99%. This ini�al financing arrangement provides the necessary capital to commence construc�on ac�vi�es and ensures the project's progression during its cri�cal phases.
Figure 18. Loan Schedule
Upon comple�on of construc�on and the commencement of leasing ac�vi�es, we will seamlessly transi�on to 30year permanent financing, with LTV 70% . This transi�on marks a pivotal moment in our project �meline, signaling stability and confidence in the opera�onal viability of our data center venture. Through me�culous financial
planning and prudent decision-making, we are poised to navigate the complexi�es of development financing and realize our vision of a state-of-the-art data center facility.
Figure 19. Pro Forma
Prior to securing financing, our unlevered internal rate of return (IRR) stands at a commendable 25.57%, accompanied by an equity mul�ple of 3.93. These figures underscore the inherent atrac�veness of the project, despite the inherent risks and challenges associated with bringing it to frui�on.
However, with the aid of financing, we an�cipate a significant enhancement in our investment returns. Our projected leveraged IRR is es�mated to surge to an impressive 58.24%, accompanied by an equity mul�ple of 3.14. This substan�al improvement in returns highlights the transforma�ve impact of financing on our investment strategy, posi�oning us to capitalize on opportuni�es and unlock addi�onal value within the project.
Risk
In addi�on to its promising prospects, the EcoLogic Data Solu�ons project is not without its risks, which necessitate proac�ve mi�ga�on strategies to safeguard against poten�al challenges.
One significant risk factor pertains to the inherent vola�lity and unpredictability of the technology landscape. Rapid advancements and shi�s in industry trends could poten�ally impact the demand for data center services, thereby affec�ng our revenue projec�ons. To address this risk, we will con�nuously monitor market dynamics and maintain flexibility in our leasing strategies to adapt to changing demand paterns. Addi�onally, ongoing investment in research and development will ensure that our infrastructure remains at the forefront of technological innova�on, enhancing its appeal to prospec�ve tenants.
Another cri�cal risk relates to environmental factors, par�cularly those associated with climate change and natural disasters. As evidenced by the moderate overall risk level iden�fied in our climate risk assessment, the site is suscep�ble to poten�al issues such as floods and extreme heat. To mi�gate these risks, we have implemented robust measures, including sitework to for�fy our infrastructure against flood damage and innova�ve cooling systems to address temperature fluctua�ons. Furthermore, our commitment to sustainability extends to resilience planning, with ongoing efforts to enhance our facility's ability to withstand environmental challenges while minimizing its carbon footprint
Addi�onally, financial risks, such as fluctua�ons in interest rates and construc�on costs, pose poten�al challenges to the project's profitability. To mi�gate these risks, we have adopted a conserva�ve financial approach, including the use of fixed -rate financing to hedge against interest rate vola�lity and comprehensive risk management protocols to monitor and mi�gate construc�on cost overruns. Furthermore, our diversified leasing strategy, which includes both wholesale and retail tenants, helps spread risk and stabilize revenue streams in the face of market fluctua�ons.
Conclusion
In summary, EcoLogic Data Solu�ons represents a visionary endeavor poised to revolu�onize the data center landscape while priori�zing sustainability and community engagement. Our me�culously planned and strategically located 120MW Temple Coloca�on Data Center stands as a testament to innova�on and reliability, offering cu�ngedge infrastructure tailored to meet the demands of genera�ve AI tasks.
Against the backdrop of a dynamic market characterized by robust growth and increasing demand for data center services, par�cularly in the Dallas region, our project emerges as a compelling investment opportunity. Despite challenges such as limited land availability and rising rental rates, our strategic posi�oning and comprehensive leasing strategy ensure a compe��ve edge in the market.
Through me�culous planning and collabora�on with industry-leading partners, we have devised a comprehensive financial strategy that op�mizes returns and mi�gates risks. By leveraging a combina�on of equity par�cipa�on and debt financing, we an�cipate a significant enhancement in our investment returns, with projected leveraged IRR reaching an impressive 58.24%.
Furthermore, our commitment to sustainability permeates every aspect of our project, from eco -conscious design features to innova�ve cooling and stormwater management systems. By priori�zing environmental stewardship and opera�onal excellence, we aim to set new standards for sustainable data center development while maximizing value for our stakeholders.
Overall, while risks are inherent in any large-scale development project, the EcoLogic Data Solu�ons team is commited to proac�ve risk management and mi�ga�on strategies. By remaining vigilant, adaptable, and
responsive to emerging challenges, we are confident in our ability to navigate uncertain�es effec�vely and deliver excep�onal results for our stakeholders.