Ashburn Church Property May Become Data Center

ASHBURN, Va. – In the data center business, proximity matters. That’s why data centers are clustered around key Internet intersections.

In Northern Virginia, the key metric in data center location is “distance to Equinix” – meaning the interconnection hub just off Loudoun County Parkway, where more than 200 networks exchange traffic. There’s no property closer to Equinix than the campus of the Christian Fellowship Church (CFC).

The church’s 22-acre property on Beaumeade Circle is next door to the Equinix campus in the heart of “Data Center Alley.” It also shares a border with the DuPont Fabros Technology (now Digital Realty) ACC development, which houses six huge data centers filled with servers for Facebook, Microsoft and Apple.

It appears this prime piece of real estate may soon house a data center campus. After months of study and negotiation, members of the Christian Fellowship Church voted last month to pursue a sale of the property, and use the proceeds to relocate to a new facility near their current location. A company in the data center industry has made an offer on the CFC property, but any sale will likely not close before the spring of 2018, and the CFC will be able to remain in its building until March 2020.

In a message to church members, CFC Pastor Brian Bales said the church’s agreement prevents it from identifying the buyer or other details of the proposed transaction. But the offer is “unparalleled in Loudoun County history,” Bales wrote in a letter to members. “In real estate terms, we have what is most valuable – location, location, location.”

Bales declined comment to Data Center Frontier on the church’s plans. But multiple sources in the data center industry say the offer for the CFC property sets a new standard for land valuation in Ashburn’s Data Center Alley, topping the $1 million an acre paid by Equinix earlier this year for a parcel further down Beaumeade Circle.

Building Boom Drives Ashburn Land Grab

The CFC’s decision to sell illustrates how the data center building boom is impacting the real estate market in Loudoun County. The rapid growth of cloud computing is boosting demand for data center space, prompting developers to pursue “land banking” strategies to lock down property for future data centers. Amazon Web Services, Digital Realty and RagingWire Data Centers are all building new campuses in Ashburn, which each will house multiple data centers.

As we’ve frequently noted, Ashburn is the Internet’s boom town. It sits atop the world’s densest intersection of fiber networks, making it an ideal location to store and distribute data. It is unique in its connectivity, and its data centers are laying the physical foundation of the digital economy.

The demand seems unlikely to cease anytime soon. The Northern Virginia data center market is coming off an epic 2016 in which multi-tenant data center operators leased a record 113 megawatts of capacity, up from 62 megawatts in all of 2015.

The growth of Internet infrastructure is driven by an insatiable demand for real-time news, sports, music and video – an ocean of data that will soon extend to virtual reality, self-driving cars and the Internet of Things (IoT). The major players in Northern Virginia are seeking room for expansion, while new players are buying land to join the action in Ashburn.

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To get the most out of their existing real estate, leading developers are now building multi-story data centers, boosting their capacity to house IT gear by adding vertical space. Meanwhile, economic development officials in Loudoun County have been working to identify additional land for data center development. Buddy Rizer, the Executive Director for Economic Development in Loudoun County, says says new electric infrastructure from Dominion Virginia Power has opened land along Route 50 and Route 606 for development.

Rizer said there are also some redevelopment opportunities, where owners of sites with existing buildings are open to selling to data center companies.

A Game-Changing Opportunity

When it comes to data center redevelopment opportunities, the CFC site is hard to beat. Its 22-acre property includes a 200,0000 square foot building that houses the non-denominational church and a Christian school, along with sports fields and a large parking lot.

Church officials emphasize that CFC’s finances are healthy. But the data center boom has altered the math for land in Ashburn, as the CFC learned earlier this year when it began developing a plan to renovate the church facilities – a project that could cost as much as $5 million.

“We believed that before we committed to taking out $5 million dollars over and above our current debt for facility upgrades, we should prayerfully and strategically investigate all our stewardship options and then return to the church membership with a recommendation for the future,” the CFC facilities team said in a message to the congregation.

Selling the Beaumeade Circle property will avoid the renovation expense, while also allowing the church to retire its debt and build a new worship facility nearby. The terms of the proposed deal give the church ample time to locate a new property, while still using its current facilities. More than 98 percent of church members voted in favor of pursuing a sale and relocation.

An additional factor was the CFC’s desire to be in the midst of people instead of servers and data centers. “Since we purchased the property over a decade ago, Loudoun County has changed,” the CFC team said. “Our church has become more physically isolated from our community and more surrounded by data centers. While we are grateful for our facility, the opportunity to be more physically visible in our community is a key consideration.”