Two American investment managers are coming together to launch a new data center business anchored in Northern Virginia.
Harrison Street Real Estate and American Real Estate Partners (AREP) are set to invest $1 billion in the joint venture.
The yet unnamed organization has secured two sites, including the location of the former AOL headquarters, currently operated by Yahoo, located on Pacific Boulevard in Ashburn. The partners are initially planning to build six ‘powered shell’ data centers totaling more than two million square feet.
A quick start
Alternative real estate specialist Harrison Street is headquartered in Chicago and has nearly $39 billion in assets under management, including several data center properties.
Its joint venture partner, institutional fund manager AREP, is based in Virginia, and primarily focused on office space, with investments totaling $4.5 billion to date.
The two firms are planning to spend $1 billion to develop hyperscale data centers in Northern Virginia, in a region known as the Data Center Alley – representing the world’s largest and most connected data center market.
The first campus – on the site of the former AOL HQ in Ashburn – will be redeveloped to offer customers four ‘build-to-suit’ data centers ranging from 265,000 to 440,000 square feet, with up to 300MW of power available.
The second campus, located on Arcola Boulevard, across the street from Google’s data center campus, will include two buildings with around 100MW of total power capacity. The first facility on this campus, codenamed ABX-1, is already under construction.
“Digital real estate is a core pillar of Harrison Street’s demographically driven investment strategy, and we are thrilled to significantly expand our presence in the world’s most active data center market,” said Michael Hochanadel, managing director and head of digital real estate at Harrison Street.
“This transaction, in partnership with AREP, provides us with unique data center campuses and immediate scale in an attractive network-dense region ensuring hyperscale cloud providers and high-quality colocation operators have the capacity they need to support their customers.”