PowerHouse Secures Site for $400M Data Center Campus

The development marks the company’s first project outside of Northern Virginia.

PowerHouse Data Centers has closed on the site of PowerHouse Reno, its planned three-building, 900,000-square-foot powered shell data center campus in Reno, Nev. It estimates the project’s total value at about $400 million. PowerHouse will build the facility as part of a joint venture with Harrison Street.

The Reno campus will be developed within the Tahoe Reno Industrial Center, in a region that’s evolving into one of the nation’s fastest-growing tech hubs as land and power have become challenging to secure in Northern California, according to PowerHouse.

The developer adds that the Reno region offers access to low-cost renewable energy, a qualified workforce, competitive tax rates and abatements, and a business-friendly environment.

READ ALSO: Will the Data Center Industry Grow More in ’24?

In a prepared statement, Doug Fleit, co-founder & CEO of AREP and PowerHouse, cited the broad-based growth of AI as a driver of hyperscale demand.

AI behind the wheel

PowerHouse currently has four developments underway in Northern Virginia totaling more than 700 MW.

Last March, the developer topped out ABX-1, its first data center project in this market. The powered shell totals 265,850 square feet and will initially provide 60 MW. The first occupants were expected in July, with final completion scheduled for this past October.

Nationally, AI seems to be steadily transforming the data center sector, according to a 2024 outlook from CBRE.

“As AI becomes more prevalent, there will be an increased need for high-bandwidth network connections to facilitate higher data transfer rates,” CBRE reports. “Major cloud-service providers are becoming more interested in less-expensive rural areas to provide their clients with AI training solutions, although many of these sites require new fiber connectivity. Edge data centers will also play an important role in 2024 due to edge computing reducing latency and enabling AI systems to process data closer to end-users or applications.”

As a result of this, strong demand versus limited supply, and other factors in the sector, CBRE said, data center prices continue to rise.

After projecting a 16 percent year-over-year pricing increase for 250kw to 500kw requirements in 2023, CBRE expects a further 10 percent to 15 percent pricing increase this year.

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