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John Haltmaier | Managing Director
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(212) 418-1183
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Overview
LongX, wholly-owned by the DeCheser Group (“DGI”), is raising $14 million of equity and debt (depending on investor preferences) as the initial tranche to build a large-scale data center on a 57.5-acre industrial lot in McKenzie County, ND at an expected cost of over $1.2 billion.
- Proceeds will be used to pay off an existing mortgage, buyout minority land-owner, conduct predevelopment work, secure permits and entitlements and fund the site development plan
- LongX owns 60% of the land, has full control of the project and plans to buy out the 40% silent partner with proceeds from the raise
- Property is ideally situated (isolated, cold climate, low taxes, inexpensive land, high fiber per capita, and pro renewable/sustainable energy development state), zoned for commercial use and approved for a data center
- Founder Peter DeCheser has an extensive background in finance, real estate and project development
Opportunity
- The US has over 5,000 data centers and accounts for roughly 40 percent of the global data center market
- Data center growth in the US shows no signs of slowing down, driven by changing work habits during the pandemic, the growth of cloud-based technologies, and the explosion of the use of artificial intelligence (AI) technology
- As an example of AI usage growth, ChatGPT users grew from 100 million per month in early 2023 to 400 million by the end of the year
- As measured by power consumption in megawatts, data center supply grew 26% in the top US markets in 2023, with a 46% increase in construction year-over-year
- 83% of the supply under construction has already been leased
Sustainability
All major hyperscale data center operators have taken some form of sustainability pledge to be more “green”, which is a major challenge for data centers due to several factors
- Consumes massive amounts of power to operate reliably 24-hours a day – a large center can use as much power as 80,000 households
- Generate significant “e-waste” from to frequent equipment upgrades
- Require large amounts of land and water (for cooling)
Solution/Strategy
- LongX believes this is an excellent site for a major hyperscale data center, utilizing a renewable/sustainable energy source – small module nuclear reactors (“SMR”)
- Large tracts of inexpensive land, such as the subject property, are available in North Dakota and zoned for commercial uses, including as data centers
- Major data center operators will be keenly interested in leasing the site given the ongoing demand growth for data processing
- Alternative power sources (local grid and natural gas-powered generators) are available to provide redundancy and in case SMRs do not become a viable solution in a timely manner
Management Team
Peter DeCheser | CEO
- Over 30 years of experience as a leading capital markets and investment services advisor
- Exclusively represented hundreds of clients, conducting more than 1,500 advisory, valuation and transactional assignments, totaling more than $30.5 Billion
- Extensive experience in real estate and renewable energy. Represented dozens of utility grade renewable energy projects in the US and abroad
- Founded DeCheser Group in 2016, which owns LongX, and has engaged in over $20 billion of energy and development projects
- Preferred vendor of Colliers International Valuation Services Group. Previously headed the Capital Markets & Investment Services Group at Colliers International and earlier held senior positions at DTZ, JLL and Massey Knakal Realty Services
- BA, Latin, Colgate University
- Executive Management Certificate, Private Equity and Venture Capital, Harvard Business School
- Executive Management Certificate, Privatization and Global Reform, Harvard Kennedy School
Specific Risks
- Demand for data center services may not materialize as expected
- New data center construction may result in excess supply and declining pricing for these services
- Construction of the data center may take longer and cost more than expected
- The data center may not perform as expected or at a profit margin that is not as high as expected due to higher costs and/or competitive pricing pressures
- The data center is to be powered by compact nuclear reactors, which have yet to be deployed for this application and will be subject to extensive environmental scrutiny
- Private securities are speculative, illiquid, and carry a high degree of risk – including the loss of the entire investment