DC Alley gets $1bn commitment from Harrison St. JV
Harrison Street has embarked on a new joint venture (JV), this time with American Real Estate Partners (AREP), and with Data Center Alley in crosshairs.
Their unnamed venture has broken ground on the first of six projects, which represent a combined $1 billion commitment to the area.
ABX-1 at Beaumeade is now under construction after the two secured land a year ago this month. It is a 265,000 square foot two-storey powered shell located directly on Loudoun County Parkway, directly on top of the Ashburn Fiber Ring.
“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 centre market,” said Michael Hochanadel, MD and head of digital real estate at Harrison Street.
He continued: “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 centre investment opportunities in the region going forward.”
Their real estate portfolio for development includes the site of the former AOL headquarters, currently operated by Yahoo and located on Pacific Boulevard in Ashburn. Once complete, the Ashburn campus will be comprised of four state-of-the-art powered shell data centres developed in a build-to-suit model for hyperscale tenants and delivering 300 MW of electrical power capacity.
In addition, 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 modern powered shell build-to-suit data centres with approximately 100-125 MW of capacity.
In total the two are planning to add 2.1 million square feet of data centre space across Ashburn and Arcola, Virginia, AKA Data Center Alley. The area is known as the most connected data centre submarket and a global industry capital.
“The demand for more data centres is simply based upon our society’s move to an even more integral life with technology,” said Doug Fleit, AREP’s Chief Executive Officer.
“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.”
“As demand for data centres continues to far outstrip current capacity, AREP is focused on developing assets that expand data availability and connectivity. Since partnering with Harrison Street in January 2021, we have executed on our commitment to acquire powered shell assets at scale for large cloud providers and colocation users in the Northern Virginia market that can be configured to best suit tenants’ power density and service needs,” Fleit added.