Northern Virginia’s data center market continues to see a hot streak of investment at the beginning of the year. A joint venture of American Real Estate Partners (AREP) and Harrison Street has announced it will develop up to 2.1 million square feet of new data center space in Loudoun County’s Data Center Alley. The partnership has committed $1 billion for the project.
In total, the entity—formed one year ago—plans to add six powered shells in Ashburn and Arcola, Va., targeted at hyperscale customers. The campuses would offer more than 400 megawatts of electrical power capacity at full build-out. The investor is looking to leverage immediate scalability potential in the tight market and meet hyperscale demand, according to a prepared statement from Michael Hochanadel, managing director & head of Digital Real Estate at Harrison Street.
One of the locations where the partnership intends to build is the site of AOL’s former headquarters at 22000 Aol Way. near Pacific Boulevard. According to Loudoun County public records, AREP acquired the 651,800-square-foot office complex from Yahoo! / Oath via an LLC, in a multi-parcel transaction totaling $136 million, recorded last month. At this location, the joint venture is planning a build-to-suit campus, slated to deliver 300 megawatts of electrical power capacity.
The four powered shells comprising the development would range between 265,000 and 440,000 square feet of gross space. One of them is currently under construction at 21529 Beaumeade Circle, named ABX-1 at Beaumeade. The partnership acquired the site earlier this month, tapping Avison Young to market the upcoming data center. Plans call for a 265,850-square-foot, two-story facility capable of offering up to 36 megawatts of critical IT power. Data halls measure 79,600 square feet per floor and customers will have access to power densities ranging from 225 to 310 watts per square foot, according to marketing materials published by Avison Young. The location provides direct access to the Ashburn Fiber Ring—a 7.2-mile mission critical network providing dark fiber and conduit services. The network was completed in 2016 by USA FIBER.
Two other upcoming facilities will be in Arcola, Va., some 9 miles south of the Beaumeade property—on Arcola Boulevard, across the street from a Google data center development. These powered shells are planned to offer between 100 and 125 megawatts capacity.
AREP was active in the Ashburn market last year, as well. In October, a joint venture of AREP and Davidson Kempner Capital Management sold Quantum Park to Landmark Dividend. The property comprises 1.8 million square feet, of which 1.2 million is data center space.
Development not slowing down
The recent development announcement comes on the heels of several other similar commitments, made by other players in the region. Last week, STACK Infrastructure announced plans for an 80-acre campus in Sterling, Va. The first phase of the 216-megawatt development is expected to come online in the third quarter of 2023.
DigitalBridge-backed DataBank announced in November that it plans to double its regional footprint. Last month, construction started on IAD3, a 200,000-square-foot modular data center expected to become operational early next year.
Northern Virginia’s extensive fiber network, low energy costs and various tax incentives are likely to continue to attract data center investors to the area.