Construction Is Underway On Vantage's $1B Northern Virginia Data Center Campus
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One of the top data center players on the West Coast unveiled plans in the fall for a $1B investment in the Northern Virginia market, and the developer has already hit the ground running.
Vantage Data Centers accelerated its timeline and broke ground in March on the first data center building of the 42-acre Loudoun County campus that is planned to be the largest in its portfolio and one of the biggest in the region.
The Santa Clara, California-based developer in October acquired the 42-acre site near the intersection of Route 28 and Waxpool Road in Sterling. Vantage Data Centers Chief Commercial Officer Lee Kestler, who will speak May 31 at Bisnow's Data Center Investment Conference & Expo East event, said the company is making the investment to establish itself as a nationwide industry leader.
"If you're a predominant player, you should be here," Kestler said of Loudoun County. "This is the Manhattan of the internet."
The full campus Vantage has planned would support at least 108 megawatts of capacity. Northern Virginia, one of the world's largest data center markets, had 787.7 MW of total inventory as of Dec. 31, according to JLL, meaning the planned Vantage campus alone represents 14% of its existing stock. The five-building campus would total over 720K SF, making it one of the largest in the world.
For the first phase, Vantage is constructing a 250K SF building shell that can support 24 MW and is speculatively building out 6 MW of capacity. It is expected to deliver in Q1.
"You have to believe you'll be able to lease it," Kestler said. "The days of saying 'I have land and I'll build if a customer just gives me a lease' are over ... we don't need to wait for a lease to be competitive."
The data center developer also has an 18-acre Santa Clara campus with over 335K SF, and another under development nearby that will total over 270K SF. It also owns a 68-acre campus in Quincy, Washington, that currently has a 6 MW facility but has the potential for four more data centers. Vantage's expansion to the East Coast comes after the company was acquired in March 2017 by Digital Bridge Holdings for over $1B.
To help finance its new projects, Vantage recently issued $1.125B in securitized notes, which it claims is the first-ever securitization financing completed in the data center industry.
"We were thrilled with the strong response from investors for this offering, which we believe speaks both to the high quality and growth prospects of Vantage’s business," Vantage CEO Sureel Choksi said in a February release announcing the financing. "Vantage now has over $500M in available funding to finance growth in existing markets and accelerate new market expansion."
While the 108 MW facility is the plan Vantage currently has on the books, Kestler says the company is exploring ways to add density to eventually build even more capacity on the site.
"We're not here for a flash in the pan to take advantage of market demand," Kestler said. "We're here to establish ourselves as a bicoastal national provider. We're not done."
Vantage's campus is not the only massive data center project in the works in Loudoun County, which has emerged as a national hub for the industry.
CyrusOne is building a 1M SF data center campus on a 40-acre portion of the Kincora project site along Route 28 in Sterling. The facility will have two stories and will also include 90K SF of Class-A office space.
Google in November paid $89M for 148 acres of land across two sites in Ashburn and Leesburg, where it plans to build two data center facilities. It expects to break ground on the first data center on a 91-acre property in Ashburn's Arcola Center this year.
Kestler, plus representatives from CyrusOne, COPT and several other industry leaders, will discuss the region's data center market May 31 at Bisnow's Data Center Investment Conference & Expo East at the Hilton McLean Tysons Corner.