Sabey Data Centers will build a new data center in Round Rock, Texas, providing the developer with its first location in the central United States. The new Sabey campus will provide up to 72 megawatts of capacity, and brings another new provider into the fast-growing Austin market.
“Austin has everything our customers are looking for: a vibrant and growing technology hub, a thriving, diversified economy, and a high quality of life.” said Tim Mirick, Chief Revenue Officer of Sabey Data Centers. “We are eager to offer our award-winning service, lowest-cost power, and market-leading total cost of ownership to companies considering Texas for data center expansion.”
This is the second major new data center for the city of Round Rock, which is also home to the headquarters campus for Dell Technologies. Switch made a major push into the Austin market in 2021, as it acquired Data Foundry and then announced plans for a 1.5 million square foot data center campus adjacent to the Dell campus in Round Rock. Last month Prologis and Skybox said they are partnering on a new data center in Pflugerville, just across Route 45 from the Dell HQ.
Growing Footprint for Sabey
Sabey Data Centers operates more than 4 million square feet of mission-critical space, making it one of the largest privately-held multi-tenant data center operators in the United States. The company operates three campuses on the West Coast in Washington State (in Tukwila, Wenatchee and Quincy), as well as two East Coast data centers in New York City and Ashburn, Virginia.
The Round Rock project will provide Sabey with a location in the Central US, which may be useful for customers seeking geographic diversity for their infrastructure. The two-building, 40-acre data center campus will feature new design innovations that maximize available data center space while shrinking its construction footprint.
This Sabey’s second expansion of 2022. In January, the company broke ground on a 70-megawatt expansion of its Quincy campus in central Washington, with a major service provider as the anchor tenant. The 2022 expansions are an example of the “super-sizing” of cloud campuses, representing larger capacity than Sabey has typically deployed in new campuses and construction phases.
The city of Round Rock has been focusing on technology companies in its economic development efforts. Last month Sabey and Round Rock City Council approved an incentive agreement to pave the way for today’s announcement. To create its campus, Sabey will demolish the old Sears Teleserv building about a mile East of the Dell campus. Sabey is currently preparing the site, and expects to break ground in June and have the first capacity available in early 2023.
The agreement anticipates that Sabey will invest at least $185 million in real property improvements and $5 million in new equipment and business personal property as part of the project and create 20 primary jobs over five years.
“We look forward to welcoming Sabey to Round Rock, which continues to grow as a technology and innovation hub,” “This project represents a substantial investment in the location of the old Sears Teleserv building and will result in high-paying jobs in our community,” said Craig Morgan, Mayor of the City of Round Rock.
“Sabey’s newest data center campus will continue to strengthen Round Rock and Central Texas’ position as a global technology and innovation hub,” said Jordan Robinson, Interim President and CEO of the Round Rock Chamber.
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Influx of Tech = More Data Centers
The data center building boom north of Austin comes as the city has seen an influx of technology jobs and companies. Oracle, Tesla and Digital Realty are among the companies that have relocated their corporate headquarters from the San Francisco Bay Area to Austin over the past several years, burnishing the region’s reputation as the “Silicon Hills” due to its strong concentration of semiconductor and computer companies, led by Dell Technologies and AMD.
While not as large as the Dallas or Houston markets, Austin has been an active location for data center capacity, with a strong local provider in Data Foundry (now part of Switch) as well as facilities from larger platforms like Digital Realty, CyrusOne, Flexential and Element Critical.
Sabey Data Centers is well funded for growth, as it is among the developers that has used securitized borrowing to fund its growth. Last July Sabey issued $175 million of securitized notes paying a fixed rate of just 1.88 percent. Last year Sabey used a similar approach to borrow $800 million, meaning the Seattle-based company has used secured financing to line up nearly $1 billion for data center construction.