Digital Realty Acquires Prime Parcel in Ashburn’s Data Center Alley

Digital Realty has acquired a chunk of prime real estate in the heart of “Data Center Alley” in Northern Virginia, according to local media.

The data center developer has purchased a 13-acre property on Filigree Court in Ashburn from Airbus Americas for $28 million, according to the Washington Business Journal, citing local property records. The purchase price works out to $2.14 million per acre, the highest price yet for a data center development property in Loudoun County.

The property is adjacent to a cluster of data center buildings operated by Equinix, which specializes in making the physical connections that tie the Internet together. Data Center Alley has become the focal point for deploying cloud computing capacity, and the Equinix campus in Ashburn is the region’s primary network intersection. That’s why “Distance to Equinix” has become a key metric in procuring sites for new data centers in Northern Virginia.

The purchase is the latest in a series of moves by Digital Realty to build a runway for future growth in Northern Virginia, the largest and most important data center market in the world. The region is home to more than 100 data centers and more than 10 million square feet of data center space. In 2018, an estimated 270 megawatts of capacity was leased by data center developers in the Northern Virginia market.

Land Banking Continues

The Airbus transaction follows last year’s sale of a nearby property to Cologix, which plans to develop 100 megawatts of data center capacity on the current site of the Christian Fellowship Church on Beaumeade Circle, which also borders the Equinix campus. That deal was valued at a reported $1.67 million per acre, which at the time was a record.

Digital Realty’s latest acquisition comes amid a period of active “land banking” in Northern Virginia, as data center developers scramble to acquire property for future development amid torrid demand from both cloud computing companies and the enterprise sector. The region is seeing unprecedented activity in both leasing and new construction, with new players entering the market and established companies looking to expand.

Digital Realty is the world’s largest data center operator, with 198 data centers spanning more than 32 million square feet of space around the global. It is already the largest player in
Northern Virginia, including more than 370 megawatts of capacity spread across three existing campuses in Ashburn: Digital Ashburn, the Ashburn Corporate Center (ACC, and Digital Loudoun, which launched last year and is already delivering data center space to customers in two huge buildings.

Last year Digital Realty paid $236 million to acquire 424 acres of land just west of Dulles Airport (known as the Western Lands) for future data center development. The company has also purchased a 62-acre parcel in Manassas for $16.5 million, which can support up to 1.7 million square feet of data center buildings and 192 megawatts of capacity.

Airbus America’s is reportedly planning to move its Satair operation from the Filigree location to the Northwoods Industrial Park in nearby Sterling.

Digital Realty has not yet announced the purchase or indicated its plans for the Airbus property. The property has extensive parking, which is often not a priority for data centers.

The competitive importance of Ashburn is reflected in the recent announcements that Compass Datacenters, Aligned Energy, Cologix, EdgeCore Internet Real Estate and Chirisa Tech Centers have all acquired land for data center campuses in Data Center Alley.  All five companies are new players in Northern Virginia.

CloudHQ, Iron Mountain and Element Critical entered the Northern Virginia market in 2017, with QTS Data Centers following in 2018 and Vantage Data Centers opening a new campus this week.

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