American Real Estate Partners, an institutional fund manager traditionally focused on office real estate, plans to develop a large data center in Northern Virginia.
In partnership with Chicago-based investor Harrison Street, AREP paid $21.5M for a 10.3-acre site in Ashburn and plans to build a two-story, 265K SF “powered shell” data center. Powered shell sites are data centers that come equipped with power and connectivity but with interiors left bare.
Courtesy of American Real Estate Partners
A rendering of AREP’s planned Ashburn, Virginia, data center
The deal is a significant one for AREP, which is angling to expand in the red-hot data center market. Construction on the new Ashburn site, located at 21445 Beaumeade Circle, is scheduled to begin later this year.
“Our newest site at Beaumeade has all of the elements data center users are seeking with its extraordinary location and access to power and fiber. This project can be delivered on a fast track basis, which market certainly needs,” AREP CEO Doug Fleit said in a press release.
Ashburn sits at the heart of Data Center Alley, the most active data center region in the world for its proximity to critical infrastructure as well as major data center customers, such as the federal government. Demand for space in the area is still riding high, with data center developments growing denser and taller as land grows more scarce.
AREP is an established player in the Ashburn market, having also acquired Quantum Park, a 1.8M SF office park that includes the 445K SF headquarters of the U.S. Customs and Border Patrol Agency. AREP currently manages 9M SF of total assets.
AREP doesn’t intend for this data center deal to be the only of its kind.
“We have other opportunities planned in the data center and connectivity sector, which has become a significant part of our long term strategy, and anticipate to make other announcements in the very near future,” Fleit said in a statement emailed to Bisnow.