Digital Realty Buys Land for Ashburn Expansion
April 28th, 2011 By: Rich Miller
Digital Realty Trust has bought additional land in Ashburn, Virginia and plans to build new data centers on the property to accommodate strong demand in the northern Virginia market, the company said today.
Digital Realty said it paid $17.3 million to acquire a 38.8 acre site adjacent to its existing data center campus in Ashburn, Virginia. The company plans to build up to 300,000 square feet of new data center space in the initial phase of development at the site. The timing of construction will depend upon the pace of leasing of available space at the existing campus.
Building Boom Continues
The new construction will continue the building boom in Ashburn, which is also a major data center hub for Equinix, DuPont Fabros Technology, Verizon Business and AT&T. The activity in Ashburn is driven by strong demand, which continues to outpace the supply of new space. Digital Realty estimates that there is at last 38 megawatts of data center requirements seeking a home in northern Virginia, compared to 27 megawatts of current supply.
Grubb & Ellis has a similar assessment in a recent market analysis. “Northern Virginia continues to witness consistent and favorable growth in the wholesale data center space and maintains balance between supply and demand, currently reflected by less than 10 percent vacancy,” Grubb & Ellis reported. “Due to current demand for turnkey suites, estimated to be between 40 MW and 70 MW, developers continue to be in a position to prelease space prior to delivery.”
Ashburn is a historic data center hub, having been the site of MAE-East, the Internet’s first major interconnection point. Equinix built its first data center here in 1998, providing a carrier-neutral facility where companies could gain access to Internet backbones operated by UUNet and AT&T. Over the years the area’s collection of data centers, bandwidth and providers has created a “network effect” that reinforces the value of facilities in the market.
I agree, Ashburn will always be a major hub in the global internet due to its readily available bandwidth options as well as its cheap power. Unfortunately land is not cheap so thats why companies like Apple, Microsoft, and others are building to the south with low latency fiber routes to Ashburn.