American Real Estate Partners (AREP), an institutional fund manager, and Harrison Street, an investment management firm, have signed a joint venture (JV) to invest US$1 billion in the development of six powered shell data centres in Ashburn and Arcola, Virginia.
The facilities will amount to 2.1 million square feet of space with each building ranging from 265,000 to 440,000 square feet in size.
The development includes the site of the former AOL headquarters, currently operated by Yahoo, located on Pacific Boulevard in Ashburn.
Once complete, the Ashburn campus will be comprised of four powered shell data centres developed in a build-to-suit model for hyperscale tenants and deliver 300 MW of electrical power capacity.
The Arcola campus is located on Arcola Boulevard, directly across the street from Google’s new development, and near Dulles International Airport.
The Arcola development will include two powered shell build-to-suit data centres with approximately 100-125 MW of capacity.
The JV has already broken ground on its first development, ABX-1 at Beaumeade, a 265,000 square foot two-story powered shell located directly on Loudoun County Parkway, directly on top of the Ashburn Fiber Ring.
AREP and Harrison Street acquired the site in January 2021.
“Speed to market is a key factor that attracts the most demanding hyperscale tenants today,” said Greg Rowles, AREP’s Managing Director of Development.
Doug Fleit, AREP’s Chief Executive Officer, said: “Every aspect of our lives is changing whether it is more connectivity with 5G and more robust streaming entertainment and communications, the inclusion of new augmented reality applications like Meta, self-driving cars and an endless evolution of new technologies and applications.
“We are creating not just exponentially more data but new and ever more useful ways to apply that data. All of this speaks to a long-term data centre trend for markets like Ashburn, Virginia.”
Michael Hochanadel, Managing Director and Head of Digital Real Estate at Harrison Street, added: “Digital real estate is a core pillar of Harrison Street’s demographically driven investment strategy, and we are thrilled to significantly expand our presence in the world’s most active data center market.
“This transaction, in partnership with AREP, provides us with unique data centre campuses and immediate scale in an attractive network-dense region ensuring hyperscale cloud providers and high-quality colocation operators have the capacity they need to support their customers. We look forward to working closely with AREP as we seek to identify strong data center investment opportunities in the region going forward.”
Since 2018, Harrison Street has invested approximately $2.4 billion in digital assets including powered shells, carrier hotels, strategic colocations and dark fibre.
In July 2021, Harrison Street acquired a minority interest in Summit Infrastructure Group (SummitIG), a dark fibre network solutions and bandwidth infrastructure provider for carriers, content providers, data centre operators, large enterprises and government agencies, with more than 600 miles of underground metro and regional dark fibre infrastructure in Northern Virginia.