1547 and Harrison Street acquire Portland Colocation Data Center

American Real Estate Partners (AREP) has partnered with investor Harrison Street to acquire a prime site in "Data Center Alley" in Ashburn, Virginia. A 265,000-square-foot data center is to be built there. The project is part of a major construction boom to expand cloud computing capacity in Northern Virginia, the world's largest data center market.

AREP paid $21.5 million to acquire a 10.3-acre site at the intersection of Beaumeade Circle and Loudoun County Parkway, one of the most strategic locations in the Ashburn market. Located at 21445 Beaumeade, the site is adjacent to data centers for Equinix and RagingWire and right next to major new sites for Equinix and Amazon Web Services. It is also in close proximity to the original Equinix Ashburn campus, which is the connectivity hub in America's most wired neighborhood.

AREP, which also owns the Quantum Park campus in Ashburn, plans to build a two-story, 265,000-square-foot "powered shell" data center with a finished structure and existing utility connections and the ability for a tenant to customize the infrastructure. Construction is expected to begin this year and can be delivered quickly, the company said.

"Data center demand far exceeds current capacity and recent construction is nearly 100 percent absorbed," said Doug Fleit, CEO of AREP. The site "has all the elements that data center users need because of its exceptional location and access to power and Fiber Optics SEARCH . 21455 Beaumeade Circle's primary and main location will enable AREP to meet this critical demand and further our investment strategy to develop assets that expand data availability and connectivity. "
Growing focus on Ashburn
The Northern Virginia market saw a record 500 megawatts of data center leasing in 2020, nearly doubling the previous record set in 2018, as the COVID-19 pandemic created exceptional demand. Data center developers are scrambling to increase capacity as total leasing took up much of the available server space.

The deal price for 21445 Beaumeade is about $2.09 million per acre, just below the record $2.14 million per acre for a 2019 land acquisition about a block south. Both deals reflect the premium for land in the most connected areas of the Ashburn data center.

American Real Estate Partners has been an active player in the Ashburn real estate market in recent years, including the 1.8 million SF acquisition of Quantum Park and the development of a 445,000 SF headquarters for the U.S. Customs and Border Protection. Quantum Park is a former UUNet site that was a major connectivity hub from the early days of the Internet.

Founded in 2003, AREP has acquired more than 17 million square feet of real estate with a combined value of more than $4 billion. The company focuses on development in the Mid-Atlantic region with a concentration of properties in the Washington, D.C., area.

The site at 21455 Beaumeade Circle changed hands in 2018 when Chirisa Investments unveiled plans to build a 30-megawatt data center on the property. It was one of several planned projects that were delayed due to an oversupply of data center space in 2019 and quickly filled when the pandemic broke out.

This year has seen a resurgence in data center construction in Ashburn, particularly in the Data Center Alley neighborhood around Beaumeade Circle.