Newmark Advises on $3.4 Billion Joint Venture on One Million-Square-Foot Texas Data Center

Rhea-AI Summary

Newmark Group, Inc. (Nasdaq: NMRK) has announced its role as strategic advisor in a $3.4 billion joint venture to fund a purpose-built data center in Abilene, Texas. The venture involves Blue Owl Capital, Primary Digital Infrastructure, and Crusoe Energy Systems Crusoe will design, build, and operate a 206 megawatt, 998,000-square-foot data center, which is 100% long-term leased to a Fortune 100 hyperscale tenant.

The data center, set to begin occupancy in 1H 2025, will incorporate innovative design optimized for direct-to-chip liquid cooling and support high energy density IT applications, particularly for artificial intelligence workloads. It will have the capacity to operate up to 100,000 GPUs on a single integrated network fabric. The project is expected to contribute nearly $1 billion to the local economy over 20 years and create almost a hundred local jobs.

Positive

• Newmark advised on a large $3.4 billion joint venture for a data center project
• The data center is 100% long-term leased to a Fortune 100 hyperscale tenant
• Project expected to contribute nearly $1 billion to local economy over 20 years
• Data center designed to support cutting-edge AI workloads at industry-leading scale
• Creation of almost a hundred local jobs

Negative

• None.

Insights

Financial Analyst

This $3.4 billion joint venture for a massive data center project is a significant development in the commercial real estate and technology sectors. The deal showcases Newmark's expertise in facilitating large-scale transactions, potentially boosting its reputation and future business prospects. The project's scale, with a 998,000-square-foot facility and 206 MW capacity, is impressive and aligns with the growing demand for data centers, especially those optimized for AI workloads. The 100% long-term lease to a Fortune 100 hyperscale tenant provides stable, long-term cash flow, which is highly valuable in the current economic climate. The expected $1 billion contribution to the local economy over 20 years and job creation are positive factors that may help secure local support and potentially expedite regulatory processes for future projects. This deal positions Newmark well in the rapidly expanding data center market, which could lead to increased revenue and market share in this high-growth sector.

Tech Expert

This data center project represents a significant advancement in AI infrastructure. The facility's ability to operate up to 100,000 GPUs on a single integrated network fabric is groundbreaking, pushing the boundaries of AI training and inference capabilities. The incorporation of direct-to-chip liquid cooling alongside air cooling demonstrates a forward-thinking approach to managing the intense heat generated by high-density computing. This dual-cooling strategy enhances energy efficiency and allows for greater computing power density. The accelerated construction timeline, delivering 200+ MW capacity in 2025, is remarkable and speaks to Crusoe's innovative design and deep understanding of AI hardware requirements. This project could set new standards for AI-optimized data centers, potentially influencing future designs across the industry. The focus on renewable energy aligns with the growing emphasis on sustainable computing, which is increasingly important for tech companies and investors alike.

NEW YORK, Oct. 17, 2024 /PRNewswire/ -- Newmark Group, Inc. (Nasdaq: NMRK) ("Newmark" or "the Company"), a leading commercial real estate advisor and service provider to large institutional investors, global corporations, and other owners and occupiers, announces it served as strategic advisor to Blue Owl Capital, Inc. ("Blue Owl"), Primary Digital Infrastructure and Crusoe Energy Systems LLC ("Crusoe") in a $3.4 billion joint venture ("JV") to fund a purpose-built data center at the Lancium Clean Campus in Abilene, Texas. Newmark's Co-President of Global Debt & Structured Finance Jordan Roeschlaub, Head of Data Center Capital Markets Brent Mayo, Co-Head of Strategic Advisory Andrew Warin and Director of Strategic Advisory Chase Tagen acted as the advisors for the JV.

Crusoe will design, build and operate the new 206 megawatt ("MW"), 998,000-square-foot data center. The property will be a build-to-suit, two-building development constructed to industry-leading efficiency and reliability standards, and capable of supporting high energy density IT applications. The project is 100% long-term leased to a Fortune 100 hyperscale tenant with occupancy expected to begin in 1H 2025. Supported by Blue Owl's investment and developed by Crusoe, the project will incorporate an innovative DC design, sharpened to support cutting-edge artificial intelligence ("AI") workloads at an industry-leading scale. The design will be optimized for direct-to-chip liquid cooling and will also accommodate air cooling. At completion, the data center will be able to operate up to 100,000 GPUs on a single integrated network fabric, advancing the frontier of data center design and scale for AI training and inference workloads.

"Crusoe's leadership team has positioned the Lancium Clean Campus to capitalize on unprecedented growth from high energy density IT applications, and the JV with Blue Owl and Primary Infrastructure only further supports those efforts," said Mayo. "We look forward to continuing to support the JV and are excited to have served as the exclusive advisor in this transaction."

The 200+ MW capacity will be delivered in 2025 on a substantially accelerated construction timeline. This speed is achieved through Crusoe's innovative design strategies and intimate familiarity with the GPUs and other integral AI hardware that will outfit the site.

The project is expected to contribute nearly $1 billion to the local economy over the next 20 years, as estimated by the Development Corporation of Abilene¹, and will focus on local hiring, creating almost a hundred local jobs. Combined with its limited environmental impact due to the proposed use of renewable energy, this project reflects Crusoe's commitment to lead the industry in sustainability and community stewardship.

Newmark Research reported in January that the data center industry is growing rapidly, fueled by expanding needs of hyperscalers, AI and other high-performance computing users, as well as large enterprises. The increased demand has spurred a surge in new development and land banking for future development, with data center construction pipelines hitting new all-time highs in 2024.

About Crusoe Energy Systems LLC
Crusoe is on a mission to align the future of computing with the future of the climate. As builders and operators of clean computing infrastructure, Crusoe reduces both the costs and the environmental impact of the world's expanding digital economy. By utilizing clean sources of energy to power artificial intelligence, crypto, and other high-performance computing applications, Crusoe is creating a future of sustainable innovation.

To learn more, visit https://crusoe.ai/ and follow Crusoe on Linkedin and X.

About Blue Owl Capital Inc
Blue Owl (NYSE: OWL) is a leading asset manager that is redefining alternatives. 
With over $192 billion in assets under management as of June 30, 2024, we invest across three multi-strategy platforms: Credit, GP Strategic Capital, and Real Estate. Anchored by a strong permanent capital base, we provide businesses with private capital solutions to drive long-term growth and offer institutional investors, individual investors, and insurance companies differentiated alternative investment opportunities that aim to deliver strong performance, risk-adjusted returns, and capital preservation.

Together with over 820 experienced professionals, Blue Owl brings the vision and discipline to create the exceptional. To learn more, visit www.blueowl.com.

About Primary Digital Infrastructure
Primary Digital Infrastructure provides flexible, repeatable financing solutions that allow data center operators to unlock precious liquidity from existing assets and achieve their development objectives. Primary Digital Infrastructure's mission is to 'risk match' this incremental capital by purchasing the best stabilized assets from developers and operators to allow them to recycle capital and finance their pipelines. Primary Digital Infrastructure is dedicated to an operator-centric model that allows the best data center developers and owners to recycle capital with as little friction as possible. Established by industry leaders Bill Stein, David Ferdman, Peter Hopper, and John Sheputis, Primary Digital Infrastructure provides capital to premier data center owners and operators through a range of financial solutions including recapitalizations, outright purchases, and forward takeouts. To learn more, visit https://primaryinfra.com/.

About Newmark
Newmark Group, Inc. (Nasdaq: NMRK), together with its subsidiaries ("Newmark"), is a world leader in commercial real estate, seamlessly powering every phase of the property life cycle. Newmark's comprehensive suite of services and products is uniquely tailored to each client, from owners to occupiers, investors to founders, and startups to blue-chip companies. Combining the platform's global reach with market intelligence in both established and emerging property markets, Newmark provides superior service to clients across the industry spectrum. For the year ended December 31, 2023, Newmark generated revenues of approximately $2.5 billion. As of June 30, 2024, Newmark's company-owned offices, together with its business partners, operate from approximately 170 offices with 7,800 professionals around the world. To learn more, visit nmrk.com or follow @newmark.

Discussion of Forward-Looking Statements about Newmark
Statements in this document regarding Newmark that are not historical facts are "forward-looking statements" that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements. These include statements about the Company's business, results, financial position, liquidity, and outlook, which may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected. Except as required by law, Newmark undertakes no obligation to update any forward-looking statements. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Newmark's Securities and Exchange Commission filings, including, but not limited to, the risk factors and Special Note on Forward-Looking Information set forth in these filings and any updates to such risk factors and Special Note on Forward-Looking Information contained in subsequent reports on Form 10-K, Form 10-Q or Form 8-K.

¹ https://developabilene.com/wp-content/uploads/2021_12_Project_Artemis_Press_Release_Final.pdf

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SOURCE Newmark Group, Inc.

FAQ

What is the value of the joint venture Newmark advised on for the Texas data center?

Newmark advised on a $3.4 billion joint venture for the data center project in Abilene, Texas.

What is the capacity of the new data center Crusoe is building in Texas?

Crusoe is building a 206 megawatt, 998,000-square-foot data center in Abilene, Texas.

When is the occupancy of the new data center expected to begin?

The occupancy of the new data center is expected to begin in the first half of 2025.

How many GPUs will the new data center be able to operate?

The data center will be able to operate up to 100,000 GPUs on a single integrated network fabric.

What is the estimated economic impact of the data center project on the local economy?

The project is expected to contribute nearly $1 billion to the local economy over the next 20 years.