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You are here: Home / Featured / Digital Realty Plans Massive Cloud Campus in Northern Virginia

Digital Realty Plans Massive Cloud Campus in Northern Virginia

By Rich Miller - August 5, 2020

Digital Realty Plans Massive Cloud Campus in Northern Virginia

A data center operated by Digital Realty, the world's largest technology landlord. (Photo: Digital Realty)

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Digital Realty is the biggest player in the world’s largest data center cluster in Northern Virginia. It intends to stay that way for a long time.

To secure its long-term leadership in Northern Virginia, Digital Realty plans to build the world’s largest multi-tenant data center campus on a 424-acre piece of land next to Dulles Airport, long known as the Western Lands. The Digital Dulles campus will create 7.5 million square feet of new data center space over a 15-year period.

The scope of the Digital Dulles project is revealed in documents the company recently filed with the U.S. Army Corp of Engineers. The development plan features 11 super-sized data center buildings, ranging from 525,00 square feet to as much as 766,000 square feet.

Digital Dulles reflects Digital Realty’s huge ambitions in building infrastructure to power the digital economy. The company operates a massive global platform of 280 data centers offering more than 1.2 gigawatts of commissioned space around the globe.

Northern Virginia houses the company’s largest concentration of data centers, with more than 400 megawatts of capacity spread across three existing campuses in Ashburn, the home to the highly connected cloud cluster known as Data Center Alley. The region continues to be the most active cloud market, with more than 100 data centers and more than 10 million square feet of data center space.

Building for A Horizon Filled With Clouds

Building data centers is a capital-intensive business that places a premium on planning. Digital Realty is experienced at playing the long game, lining up funding and land to keep pace with the rapid growth of its tenants in the cloud computing arena.

That is particularly important in Northern Virginia, a highly-competitive market known for “land banking” as data center developers scramble to acquire property for future development. Digital Realty has amassed 672 acres of land, enough to support another 1,000 megawatts – yes, another gigawatt – of data center capacity in the region.

These properties provide Digital Realty with a lengthy runway to build large data centers, which are more essential than ever in the COVID-19 pandemic, which has boosted traffic for the major online platforms that lease space from Digital Realty and other data center REITs (real estate investment trusts).

In the midst of the pandemic, Digital Realty leased 48 megawatts of capacity in Northern Virginia between April and June, an acceleration from leasing of 38 MWs in the previous two quarters combined. The company’s development pipeline in the region has been fully pre-leased since early 2020, with customers buying capacity before the company can complete construction.

That can be a challenge for capacity planning, so Digital Realty and other REITs try to constantly have new sites permitted and ready for construction.

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“In Northern Virginia, we have the longest runway of future-proofing our customers’ growth in terms of capacity and potential build-out,” said Bill Stein, the CEO of Digital Realty, in the company’s earnings call last week. “We have a very large installed and growing customer base that wants to grow with adjacency.”

This deployment strategy is known as “land and expand,” as a tenant makes an initial commitment for data center space, with the option to add additional capacity in adjacent space on the campus. Before you can expand, you need to have the land.

Large Data Centers, and Lots of Them

Digital Realty’s land bank in Northern Virginia includes Digital Dulles as well as a new campus known as Digital Sterling, a 22-acre site along Route 28 and Pacific Boulevard in Sterling that just received zoning approval for data center use. The company also owns 13 acres in Data Center Alley, adjacent to a strategic cluster of data center buildings operated by Equinix, which specializes in making the physical connections that tie the Internet together. To the south, Digital Realty has acquired a 62-acre parcel in Manassas in Prince William County, which has seen strong growth as a more affordable alternative to Ashburn.

Digital Realty bought the Western Lands site from the Metropolitan Washington Airports Authority for $236 million in 2018. The huge site offers the opportunity to build big, and Digital’s initial site plan delivers.

A map depicting the location of the Digital Dulles data center campus, which Digital Realty is building. (Image: Digital Realty)

Documents filed with the Army Corps of Engineers describe a massive campus, consisting of 11 two-story buildings, including:

  • One 524,000 square foot data center
  • Six 645,000 square foot data centers
  • Four 766,000 square foot data centers

That works out to 7.46 million square feet of data centers spread across 116 data halls. Each data center will support between 96 megawatts and 144 megawatts of power, according to the filing, suggesting a total power capacity of more than 1 gigawatt.

No start date was provided, and the application notes that the plans may vary and that “due to the scale of the proposed project, the applicant anticipates an extended buildout period that would span over 15 years.” The filing describes how the project will work with wetlands and streams on the site. The site plan was revised from an original proposal of 13 data centers and 8.3 million square feet to address some land use concerns.

Digital Dulles is the new frontier in the trend toward larger data center leases, larger buildings and larger campuses (see our 2018 piece Hyperscale Data Center Deals Will Get Bigger. Much Bigger, which anticipated this shift).

The largest announced multi-tenant data center campus is the Switch Citadel near Reno, which Switch says will span 7.2 million square feet upon completion. The campus opened in 2017, and Switch has built the first phase, a massive 1.2 million square foot data center.

Digital Realty has also created some massive data center buildings, most notably Building L, the 120-megawatt, 1.05 million square foot flagship of the Digital Realty Ashburn armada. The company now operates 21 data centers across three campuses in Ashburn

The strategic importance of the hyperscale market in Ashburn was underscored in Digital Realty’s largest M&A deal, the 2017 acquisition of DuPont Fabros Technology (DFT) for $7.6 billion. DuPont Fabros was Digital’s primary competition in Ashburn, where DFT’s nine-building ACC data center campus was filled with marquee tenants like Facebook, Microsoft, Apple and Rackspace. The deal consolidated power for Digital Realty in Northern Virginia, and seems even more prescient in light of the acceleration of demand in Ashburn since 2018.

An overview of Digital Realty’s holdings in Loudoun County, Virginia. Click to see a larger version. (Image: Digital Realty)

Boom Continues in Dulles Cloud Corridor

The revelation of Digital Realty’s massive Dulles campus follows news that Amazon Web Services is planning a huge campus on the southern border of Dulles Airport, which will support up to 2.5 million square feet of data center space. If fully realized, these two projects could create 10 million square feet of data center space on land adjoining the airport.

Those two projects are the largest in a flurry of deals that have expanded data center development in the new Dulles Cloud Corridor.

  • Google has built its first data center on a campus in Arcola, just West of the airport and adjacent to a site where AWS has three data centers.
  • AWS has built six data centers south of the airport along Route 50.
  • In February 2018, an affiliate of Amazon proposed a 600,000 square foot data center campus on 44 acres just off Route 50.
  • In September 2018, CyrusOne acquired 39 acres of land at the intersection of Old Ox Road and Route 606 for a future data center campus. CyrusOne paid $38.9 million in cash, or just shy of $1 million an acre.

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Tagged With: Ashburn, Digital Realty, Dulles Cloud Corridor, Northern Virginia, Northern Virginia Data Center Market Special Report

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About Rich Miller

I write about the places where the Internet lives, telling the story of data centers and the people who build them. I founded Data Center Knowledge, the data center industry's leading news site. Now I'm exploring the future of cloud computing at Data Center Frontier.

Comments

  1. jmcwhirt@digitalrealty.com'Jeff McWhirt says

    August 5, 2020 at 8:18 pm

    Wasn’t that 70% of traffic stat myth busted? https://blog.telegeography.com/does-70-of-the-worlds-internet-traffic-flow-through-virginia Either way, Go Digital Realty!

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