Koch Real Estate Investments and its portfolio company, Edged, are using their capabilities and innovative technology to partner with the world's biggest tech companies to meet the growing demand for data centers.
From sending photos of your kids’ latest dance recital to grandma to utilizing self-driving vehicles and ChatGPT, sending and receiving digital information is at the foundation of much of modern society. The past few decades have seen tremendous growth in the need for physical locations to handle all this digital information and computing done in the cloud, and even the most conservative estimates predict that the development and implementation of AI solutions will only accelerate the need for more data centers.
“Imagine the amount of time that you, every friend, every work colleague is spending on their phone and on their computer,” said Justin Wilson, Koch Real Estate Investments managing director and leader of their platforms vertical. “The proliferation of data, its creation, transmission, analysis — it’s a secular trend that has been in play for many years.”
It's a trend that KREI couldn’t ignore. Leveraging the relationships KREI has built across the real estate and infrastructure industries, as well as Koch cooling/power experts and outside consultants, KREI developed a knowledge base on the data center market. As a result, the KREI team found itself in an advantageous position to find the right partner to help meet the increasing demand for data center development.
In partnership with Jakob Carnemark, an experienced entrepreneur in this space, KREI created a new company known as Edged. Since its creation, it’s already built several large projects for some of the biggest hyperscalers in the industry. Projects built or in development include a 96MW facility in Chicago, a 24MW facility in Kansas City and a 168MW facility in Atlanta.
“Our team believes we’re going to continue to see steady growth within this space,” said Hal Mutlu, KREI director. “We’ve found a measured approach to capitalize on this trend in an effective manner which protects our downside and doesn’t overextend us.”
The industry faces several major challenges, as demand for new data centers outpaces the ability to build them. First, you find and develop the land, then procure sufficient power for the project. Finally, most data centers need access to a large enough water supply to help keep the rows of servers cool and operating efficiently.
Justin said KREI and Edged have the capabilities and technology to help address these challenges.
Edged’s expertise is in finding and buying land, organizing large construction projects and procuring the necessary power agreements with local utilities.
KREI has tapped into the vast expertise found across Koch companies to support Edged and explore power solutions for new projects.
“We spend time with Koch companies like Optimized Process Designs, DEPCOM and a handful of others to try to find ways to leverage the vast resources Koch already has,” Hal said.
Koch’s broad capabilities also allow KREI and Edged to offer what’s known as “behind-the-meter” power solutions, such as on-site solar and battery storage and natural gas power generation, to fill in some of the electricity demand gaps. These kinds of power setups are already happening at many Koch facilities across the world, and KREI is able to tap into that knowledge and experience.
Finally, Edged addresses the issue of the large amount of water typically needed at a data center with the use of its internally developed advanced cooling system, ThermalWorks. It’s an ultra-energy-efficient, closed-loop cooling system that consumes zero water while enabling ultra-high densities of up to 200 kW per rack.
Collaborations that lead to these kinds of innovative solutions are another example of how Koch’s Stewardship Framework guides Koch and its companies to develop products and services that improve people’s lives while using fewer resources.
“We’re very conscious about trying to find opportunities to leverage co-capabilities, learnings and knowledge to the benefit of Koch and Edged,” Justin said.
He added that through these mutually beneficial partnerships, KREI and Edged can provide the expertise and capabilities that major tech companies either don’t have or don’t think would be worth the time or effort to build on their own from the ground up. It’s a win-win situation that helps everyone succeed.
