Last month, the Berkeley National Laboratory, under contract with the US Department of Energy, published this report estimating total data center energy usage across the country. It also forecasted future demand out to 2028.

As you can see, in 2018, total electricity consumption by US data centers was estimated at approximately 76 TWh or 1.9% of the US total. In 2023, consumption more than doubled to 176 TWh or 4.4% of the US total. And by 2028, this is expected to further jump to somewhere between 6.7-12% of the US total.

Here's some commentary from the report:

With significant changes observed in the data center sector in recent years, owing to the rapid emergence of AI hardware, total data center energy use after 2023 is presented as a range to reflect various scenarios. These scenarios capture ranges of future equipment shipments and operational practices, as well as variations in cooling energy use. The equipment variations are based on the assumed number of GPUs shipped each year, which depends on the future GPU demand and the ability of manufacturers to meet those demands. Average operational practices for GPU-accelerated servers represent how much computational power, and how often AI hardware in the installed base is used, to meet AI workload demand. Cooling energy use variations are based on scenarios in cooling system selection type and efficiency of those cooling systems, such as shifting to liquid base cooling or moving away from evaporative cooling. Together, the scenario variations provide a range of total data center energy estimates, with the low and high end of roughly 325 and 580 TWh in 2028, as shown in Figure ES-1.

This strikes me as being an important macro trend and a big deal. All signs point to more data centers being needed. And before we know it, they're going to represent a meaningful chunk of total electricity usage.

Note: TWh = terawatt hour = one trillion watt hours

I think that lots of people would like to live in multiple places around the world. I know I would. That's why when people get rich and have the means, they often start to buy second homes. To that end, here's an interesting concept out of Japan called Not a Hotel.

Their model is fairly simply. What they do is build incredible design-forward vacation homes across Japan and then sell fractional shares, while at the same time offering full concierge and management services.

The typical fraction is for 30 days (1/12th), but if you'd like, you can buy up to the entire year. Ownership gives you access to the property for the amount of days you've purchased, or you can trade your days and stay at other homes within the Not a Hotel network.

On the nights you don't use, the company operates the home like a hotel and the owner gets the benefit of reduced management fees.

Most of their homes are already completely sold out. But 1/12th of this home in Kitakaruizawa is available for US$490,000. And on the other end of the spectrum, 1/36th of this Bjarke Ingels-designed home is available for US$2,460,000.

Here's a video of the home:

Fractional ownership is not a new model, but it is still relatively niche. I also think that the way Not a Hotel is going about it -- with their focus on over-the-top design and architecture -- is pretty unique.

Today is the third day of New York's new congestion relief zone. And if you're curious to see how it's already impacting traffic conditions, here is a website run by Joshua Moshes and Benjamin Moshes, under the supervision of Brown University Professor Emily Oster.

The site collects Google Maps traffic data every 15 minutes for 19 routes leading into Manhattan (some of which are directly affected by the new relief zone and some of which are not). It then calculates average traffic times for each day of the week, both before and after the congestion charge.

Here is the Holland Tunnel on Sunday (which was day number one):

And here is the Holland Tunnel on Monday (which was the first weekday):

Already, we are seeing a meaningful reduction in average traffic times. Maybe demand is more elastic than I suggested yesterday. But obviously we're only looking at two days. So I'll check back in later once we have more data points. In the meantime, if you'd like to follow along, you now have a website.

Good morning. Well, it finally happened.

After decades of delay and negotiations, New York City finally implemented congestion pricing for the area of Manhattan south of 60th Street. This is a first for the United States, and so it's a big deal not just for the city, but for this part of the world. It went into effect yesterday, on Sunday at midnight, so that the MTA could work out any kinks before this morning's rush hour. And apparently everything went smoothly. Drivers are now required to pay $9 to enter the zone during peak hours (5am to 9pm during weekdays). The charge is also expected to rise to $15 by 2031. Of course, this is a highly contested initiative. Trump is still vowing to kill the program as one of his first acts in office and, as soon as the pricing came into effect, suburban drivers started protesting it in Manhattan. I thought Jarrett Walker had a clever response to this:

Jarrett Walker

@humantransit

Tip: An effective protest is one that doesn't prove the other side's point.

Phil Walkability🇺🇸🦅🌲💙

@PhilSustainable

To protest congestion pricing, Suburban drivers are driving into Manhattan and blocking traffic with their cars. These extreme activists plan to make streets so unsafe and gridlocked that NYC businesses lose money!
Only car owners can shut NYC down and send a message!

2,029

6:01 PM • Jan 4, 2025

One of the common rebuttals when it comes to things like road and congestion pricing is this one: "yeah, this might work in cities like London which have great transit systems, but it doesn't work in our city because we don't have that and it will unfairly disadvantage those who have no other alternative but to drive." In fact, this exact excuse was recently raised by local politicians here in Toronto. But this is New York fucking City. It has the highest annual transit ridership in North America (beating out Mexico City by nearly 2x) and it has the largest system by total length. According to the 2012-2016 American Community Survey, 85% of people traveling to Manhattan's CBD (I'm assuming lower Manhattan here) also take transit. And only 11% drive a car. So what exactly is the problem here?

This objection also ignores the fact that, generally speaking, congestion pricing has two main goals: (1) to, of course, reduce traffic congestion and (2) to generate money for more efficient modes of transport. In this case, the MTA is hoping this new congestion relief zone will generate up to $15 billion that can then be reinvested in transit and other infrastructure. Demand for roads can also be relatively inelastic in the short term, meaning demand doesn't change all that much as the price moves up and down. This makes it a good place to find money for public infrastructure, but it might mean that $9 is too low to have a dramatic impact on traffic congestion. We will see; I'm sure we'll get some data soon enough.

My prediction is that this will ultimately have an impact on congestion and that people in New York will get over the $9 charge. They'll also come to appreciate the reduced traffic congestion within the zone. So I think this road pricing will stick, and my hope is that it will become an example for other cities in the US and across North America. Congratulations on finally getting this over the line, NYC. It was certainly a hard-fought battle.

Cover photo by Veronika Galkina on Unsplash

I've been reading this book before bed over the last few days. It's about the Wasatch Mountains in Utah, but more broadly it's about how snow works, why and where in the world epic storms happen, how not to get killed in avalanches, and how global warming is impacting our climate. It's written by Jim Steenburgh, who is professor of atmospheric science at the University of Utah and author of the blog Wasatch Weather Weenies. And I'm finding it really fascinating, even if there are limits to how granular I want to get on the science behind stellar dendrite snowflakes.

One of the main questions he answers is, of course, the title of the book: Why is the powder skiing and snowboarding so good in Utah? Is it in fact, the greatest snow on earth? (The State of Utah started using this very successful slogan in 1962 and it made its way onto license plates starting in 1985). It turns out that there's lots of science to support this claim, particularly when it comes to the Big and Little Cottonwood Canyons on the east side of the Salt Lake Valley. This is where you'll find resorts like Snowbird, Alta, Brighton, and Solitude.

Little Cottonwood Canyon has one of the most dramatic snowfall contrasts in the world. At its entrance in the valley, the average annual snowfall is about 100 inches. But drive 7 or so miles into the canyon to Snowbird (which during a snowstorm can be super treacherous), and the average annual snowfall increases to over 500 inches. Generally speaking, the average annual snowfall in the canyon increases by about 100 inches per 1,000 feet of elevation gain.

One of the reasons for this is that the terrain surrounding the Cottonwoods is both high and broad, which means that it is exposed to storm flows coming from nearly any direction. During "stable storms", this can also create a blocking front, where storms get caught on the windward side and continue to dump in one place, instead of passing over the mountain. This is one of the reasons why there's this saying: "It doesn't need a reason to snow in Little Cottonwood Canyon; it needs a reason to stop."

Another very snowy place in the world is Japan's Hokkaido Island. In fact, Jim argues that if there's any place that could give Utah a run for its money with the claim of the greatest snow on earth, it's here. Based on historical data, Hokkaido Island has a 90% chance of at least 100 inches of snow in the month of January. This is a lot more than Utah, though snowfall falls off more quickly outside of the peak months.

So statistically, if you want the highest probability of powder snow during the month of January, Hokkaido is the place for you. It also happens to be where we're going for our annual ski and snowboard trip this year. I'll be sure to report back and confirm whether this is true or not.

The last chapter in the book is on climate change and he starts by stating the obvious: global warming is real. The climate of the Wasatch Mountains today is demonstrably warmer than it was when they were mining silver in Little Cottonwood Canyon in the late 19th century. That is bad news for skiing and snowboarding, and already in the Western US, declines in the average snowpack below elevations of 8,000 feet have been observed.

The good news is that there's yet to be a clear and consistent trend above 8,000 feet (at least according to Jim when he wrote the first edition of this book about a decade ago). So stay high up, my friends. If you're interested in this topic, or climate in general, I would highly recommend you check out Jim's book. Or at the very least, his blog. I'm going to take my copy of the book and leave it at Parkview Mountain House the next time I'm there so it's available to everyone who visits. It's fascinating stuff.

Cover photo by Alex Moliski on Unsplash

I was just introduced to a development firm based in Los Angeles called SuperLA. They are focused on sustainably built infill apartments and last year they completed what is the first ever mass-timber multifamily housing project in Southern California. Located at 3520 Marathon Street in Silver Lake and called the "Bungalows on Marathon", the project is 3-storeys (with parking underneath that takes advantage of the slope of the site) and has 9 homes.

Six of the homes are one-bedroom (~660 sf of interior space) and three of the homes are two-bedroom (~1,320 sf of interior space). It's a beautiful project. And because it's LA, all of the building's circulation is outside and tucked toward the back of the site. It's also not a huge site -- my rough Google Map take-offs have it at approximately 12m x 40m. So let's call it the equivalent of two Toronto single-family lots.

Based on suite count, this is similar to the kind of density that you could get in single-family neighborhoods throughout Toronto. However, the built form here on Marathon is decidedly more urban. Despite its horizontality, LA is not as low-density as many might think. For more on SuperLA, here's their website. They've also done a great job with their brand and identity.

Photos via SuperLA

I was at a family lunch this week and we got on to the topic of VR/AR headsets. Some of my relatives have the Meta Quest, but nobody has the Apple Vision Pro and nobody has even tried it. However, the comment was that the Meta one is already pretty convincing, so the Vision Pro must be that much more amazing. Like I do on this blog, I encouraged everyone to go and book a demo.

What is obvious, of course, is that Vision Pro is far from a mainstream product. Few people are buying it. It's too expensive. And I think most people can't imagine a world where it becomes part of their daily life. But as we were all talking, I was reminded that I'm dangerously close.

Here are 3 use cases that I'm already excited about:

• Watching movies and doing work on airplanes. I love traveling. But sitting on a plane sucks. If I could watch immersive movies and bury myself in work, I think I might actually enjoy having my femur crushed by the seat in front of me. It would be an environment free of any distractions. Already I have found reliable in-flight wifi to be a game changer for productivity.

• Experiencing live sports from seats I wouldn't pay for in real life. To be fair, I don't generally watch a lot of sports unless a Toronto team is in the playoffs. But selling an unlimited number of courtside seats (or their equivalent) to people via Vision Pro seems like an obvious use case. I would pay for this after experiencing Lebron dunk in my face in the demo, especially if it works with groups of people. And if it doesn't already exist, I'm sure there will be a way to stream live content.

• Walking through the BIM model of a yet-to-be-constructed building. The construction industry needs this. I need this. I walk all of our sites at least once a week. But imagine if it were possible to do this before construction actually starts and costly mistakes are found on site. That's always been the promise of BIM, but alas, it hasn't solved the problem of poorly coordinated drawings and too many site changes.

The list of great use cases is endless. These are just 3 that immediately came to mind and that wouldn't require the technology to be significantly better to spur greater adoption. In fact, the technology is already there and convincing enough. I also don't think the above requires the hardware to be as small, or as fashionable, as a pair of sunglasses. It just needs to be cheaper, a bit more portable, and have a few incremental features.

At that point, I'll be ready to buy. What about you?

Cover photo by Bram Van Oost on Unsplash

Welcome again to 2025.

Yesterday we spoke about what might happen in 2025 and my predictions for the year ahead. Today we're taking about what Globizen is specifically focused on. But first, I think it's important to reiterate what we're all about. We are a city building company and community focused on creating better places. These words were chosen carefully. We want to be both a business and a community.

What this means is that in addition to obviously working on our own property portfolio, we also want to collaborate with others on this mission of creating better places. It is recognition that "city building" takes many forms; we couldn't possibly do it all; and we want to broadly support all those who are doing great things and working to build more livable, beautiful, and economically vibrant places.

Now, our work. At the highest level, we are focused on three development strategies:

• Differentiated end-user focused condominiums in prime locations. While we do think that it will take a few years for the market to absorb the current pipeline of condominium projects under construction in the GTA, we also believe these 3 things to be true: (1) end-users represent a more durable demand segment for housing compared to investors; (2) prime locations in global cities such as Toronto will maintain their value over the long term; and (3) design-focused and differentiated product offerings only become more valuable in a down market. Overall, this thesis is based on the view that we are in the midst of a housing reset and that there is/will be a market for the right projects. In some cases we will aim to execute in the short-term, and in other cases we will set ourselves up to be patient.

• Infill apartments in walkable and transit-oriented communities. We see the scale of housing that is permitted on an as-of-right basis continuing to grow. Over the last few years, Toronto added permissions for fourplexes, then 6-storey apartments, and the current plan is to streamline the process for even larger mid-rise buildings. This is creating two interconnected opportunities: (1) the ability for developers to feasibly develop smaller projects; and (2) the opportunity for a systems-based approach to development -- one that allows a greater repetition of designs, materials, and the overall process. We call this the "productization of housing", and it's fundamental to our multi-family rental strategy.

• Hotels, creative retreats, and hospitality experiences. Increased travel, remote work (including from digital nomads), and a desire for unique in-person experiences; these are all important and growing macro trends that will continue to reshape the landscape of our cities. We think of this as being centered on an underlying aspiration to be a kind of citizen of the world, and so we're interested in real estate opportunities that can respond to this demand. Last year, we completed our first "creative retreat" in Park City, Utah. And this year, we're focused on bringing the first design and lifestyle hotel to the waterfront in Canada's largest wine region -- the Niagara Benchlands.

Alongside these specific strategies, we are committed to growing our real estate advisory and development management services business. This is something we started in earnest in 2024 and want to do more of this year. Finally, we would like to grow our lifestyle shop and ramp up content creation in a way that can support our real estate strategies and our broader goal of promoting and creating better places. It's going to be a fun year.

If you'd like to work with us on any of this, please do get in touch.

Happy new year, everyone! Yesterday we spoke about what actually happened in 2024 (and evaluated my predictions from exactly a year ago). Today, let's prognosticate about what might happen in 2025 (keeping in mind that I'm based in Toronto and so there will naturally be a bias toward this market):

• Very broadly speaking, our current commercial real estate downturn started, in my opinion, around the middle of 2022. That's when sentiment started to feel different and the market was starting to respond to increasing interest rates. Over the past few years, I've been overly optimistic in terms of how soon the market would reset. But eventually I'll be right. So I'm going to call 2025 as an important turning point where we see more capitulation, more bankruptcies, and a shedding of legacy assets/deals. For the other side of the market, this will mean more new deals.

• This, however, does not mean that we will see a development environment that anywhere resembles what we saw prior to 2022. On the new construction residential side (condominium and multi-family rental specifically), I think it's going to take 2-3 years for us to work through and absorb our current supply pipeline. This will be an obvious headwind for land prices. The successful projects in this environment will be located in core/prime locations, underwritten at more modest scales, and focused largely on end users.

• In 2024, we saw the continued rise of more people going back to the office. Here in Toronto, the average weekday figure is approximately 73% of what it was pre-COVID (data from November 2024). This year, I think we'll see this figure get close to 90% and then likely start to level off, some five years after the first lockdowns. I think it makes sense that we'll stabilize at some number below pre-COVID levels, but I also think it'll be a number that is much higher than most people expected just a few years ago.

• I am reversing my position on autonomous vehicles (relative to last year). I believe we're much further along -- specifically Waymo is -- than most people think right now. Autonomous vehicles are happening and, in 2025, I think we'll see a significant expansion of coverage across the US led by Waymo + Uber. I don't think we'll see anything earth shattering from Tesla in regards to FSD, but who knows, Elon is good at making things happen. The big test will be cities with snow. This will likely take longer.

• At the time of writing this post, the price of EU carbon permits is approximately €71.98 per tonne of carbon dioxide. It's all-time high was €105.73 in February of 2023, but some/many believe that it will need to be closer to €150 by 2030 if the world hopes to reach net zero by 2050. So for this reason, I'm going to say that its price rebounds to between €90-100 this year. This is largely a guess, but I'm including it in my predictions (at least partially) because it's quantifiable and easy to score later.

• Crypto and technology more broadly are going to have an awesome year in 2025. As Fred Wilson wrote on his blog yesterday, one of the things we saw in 2024 was "Silicon Valley's hostile takeover of the federal government, via an infiltration of Donald Trump's MAGA movement." The "establishment government" was seen as being antagonistic toward tech and innovation, and so the industry jumped teams. One would expect that to pay dividends this year.

• More specifically, I think we're going to see a web3 consumer application that finally breaks into the mainstream. Already, I've been impressed by NFT marketplaces like Rodeo. Many people won't appreciate that it's powered by some blockchain, but that's exactly what we want. We want the underlying technology to recede into the background and for the experience/utility to come into the foreground.

And with that, I will end and leave you all with this recent tweet from Chris Dixon. It's worth clicking through and reading the entire thing.

cdixon.eth

@cdixon

“The time will come when diligent research over long periods will bring to light things which now lie hidden. A single lifetime, even though entirely devoted to the sky, would not be enough for the investigation of so vast a subject...

And so this knowledge will be unfolded…

303

7:40 PM • Dec 28, 2024

A big thank you to everyone who continues to read this blog. We're now into year 12 of this daily writing practice (my first post was in August 2013), and I'm still feeling more inspired than ever. It truly feels like we're at the dawn of so many new and exciting things: a new real estate cycle, an unprecedented innovation environment, and the list goes on. Next up, I'm going to write specifically about what we at Globizen are focused on for this upcoming year.

Cover photo by Tyler Rooney on Unsplash

Exactly a year ago, I wrote this post talking about "what might happen in 2024." Now let's see what actually happened and how I did with my predictions.

• Interest rate cuts: This was perhaps an easy one as there was already a market consensus that rates would start to come down in 2024. The Bank of Canada cut its policy interest rate by 175 bps (target of 3.25%), and the US cut its federal funds rate by 100 bps (target of 4.5%). [1 point]

• Impact of higher rates: I predicted that things would get worse in 2024 before they started to get better (maybe toward the end of 2024 or perhaps in 2025). In some ways, I think I was right. But I'm not sure we've returned to a "risk-on" approach in commercial real estate, like I suggested. Toward the end of the year, my American friends were telling me that things were suddenly feeling a lot more optimistic and that more deals were being done. But I still feel like we've been kicking the can down the road here in Canada. The public markets certainly did very well, but I think the private markets are still hiding some underwater real estate investments. [0.5 point]

• Balanced residential resale market: I thought that we would return to a more balanced resale market in 2024, certainly for the most-in demand cities and submarkets. Here in Toronto, it remains a buyer's market on the condominium side, but the freehold market in Central Toronto has shown signs of improvement over the last few months. Detached house values are up 4.6% year-over-year, despite listing supply also being up 29%. The resilience of core submarkets is what you would expect to see right now during this part of the cycle. (If you're interested in Toronto real estate, my friend Christopher Bibby has a great newsletter that he publishes periodically.) At the same time, I thought that the Bank of Canada would be more resistant to lowering rates compared to other central banks, and that this would be good for the Canadian dollar. I was wrong. [0 points]

• Finding good real estate deals in 2024: I argued that this year would be a pivotal year for finding new opportunities. Maybe that was the case for some of you, but as I said above, I think that here in Canada we're still kicking the can down the road. So this one is hard to say. 2025 may end up being more pivotal for many real estate developers and investors. [0 points]

• Declining hard costs: Like many of my other predictions, this is market specific. But this absolutely happened here in Toronto. For some trades and divisions, costs are down in the range of 25-30%. And I can tell you that over this past year I received many phone calls from construction executives that sounded something like this, "Hey, I'm about to lay off a bunch of people, so I just wanted to call and see if you might have any new projects starting up in the near future." [1 point]

• Return to office: A year ago, I wrote that return to office seemed to have stalled out at around 50% utilization. But I argued that this wouldn't hold and that, of the people who work in offices, most would go back to spending > 50% of their week in it. Looking at the latest data for Toronto's CBD (from November 15, 2024), the average weekly utilization figure is now up to 73%. And the peak day figure (Wednesday) is now 84%. (Both of these are relative to pre-COVID.) This is up meaningfully compared to last year. I don't know at what point we reach an equilibrium, but for now, we seem to be still heading up and to the right. [1 point]

• Augmented reality: 2023 was the year of AI. I argued that this year would be the year of augmented reality and that this would represent a further blurring of our offline and online worlds. This was, I think, coming from the fact that Apple Vision Pro was set to be released. But if this happened at all, it happened only incrementally and it certainly wasn't a mainstream phenomenon. Most people I talk to haven't even tried Apple Vision Pro, though I remain blown away by the technology. If you haven't yet tried it, do yourself a favor and book a demo at your local Apple Store. That said, I'm not going to give myself any points for this one. [0 points]

• Autonomous vehicles: I was somewhat bearish on this a year ago. I said that it feels as if we're in the trough of disillusionment (within the hype cycle), even if I was optimistic long term. So this year was a pleasant surprise and I was thoroughly impressed by the progress that Waymo, in particular, made. As of June of this year, they had already logged over 22 million rider-only miles. They are the company to beat right now. [0 points]

• Impact of automation: This was a weak prediction because it wasn't particularly precise. I said that our shift toward greater automation would feel more insidious than immediate (certainly in 2024). I guess this is true. Elon Musk unveiled dancing bartender robots this year, but they weren't exactly ready to take all of our jobs. Reluctantly, I'll give myself a half point. [0.5 point]

• Growth of TikTok Shop: This is where I argued that we should be looking for the future of shopping. And the data certainly supports this. According to recent research from The New Consumer, over 60% of Gen Z's report using TikTok every day. And half of all monthly active users report having already made a purchase through the platform. For those that use it every day, this figure increases to 57%. I don't use TikTok very often -- if at all -- but I know it's extremely popular. I'm also not an expert on e-commerce, but I have a belief that TikTok (and the likes), augmented reality, and crypto are going to give birth to some interesting new ways of buying things. [1 point]

• Return of crypto: When I wrote last year's post, the total crypto market capitalization was approximately $1.74 trillion. This was down from almost $3 trillion at the peak of the market in 2021. I argued that the "crypto winter" would end this year and that its total market cap would exceed its previous peak by the end of this year. Today, it's about $3.45 trillion. If only I bought more. But to be honest, this was a total guess. [1 point]

Total score: 6/11 (~55%). Not bad.

I like this score because it means I'm not being too consensus. What fun would that be? That said, I do think some of my predictions were a little obvious. I don't want to be just extrapolating existing data forward; I want to be thinking critically. I also try not to stray too far into topics that I'm not well versed on, like shopping on TikTok. But it's a fine line given my strong interest in tech and crypto. I'll see what I can do to tighten things up and be a little more non-consensus with my predictions this year.

Stay tuned.