Boston-based real estate investment management services provider TA Realty LLC this month announced that it has signed a 430-megawatt build-to-suit lease agreement for its entire data center campus in Loudoun County, Virginia, specifically in the Town of Leesburg.
As stated in a Nov. 16 press release, the new agreement with "a premier global cloud services provider" includes leases across five buildings, making up the entire 1.9 million square-foot project.
As noted at DCF previously this year, data center projects exceeding 100 megawatts once seemed unthinkable -- but have now become routine. And with those blockbuster developments come equally weighty, not to say unprecedented, pre-leasing agreements.
Reports earlier this year from research firm datacenterHawk and investment firm TD Cowen found data center leasing at record levels, as cloud providers look to secure capacity for AI workloads.
“This project exhibits TA Realty’s ability to source outstanding opportunities in the data center industry, particularly in Tier 1, mature markets,” said Allison O’Rourke, Partner at TA Realty.
O’Rourke added, “Our dedication to creating value through partnering with local authorities, utilities and network partners led to this opportunity. We look forward to supporting this strategic customer and working alongside them to complete this world-class project.”
Long-Term Digital Infrastructure Ambitions
Plans in 2021 called for TA Realty to invest $1.8 billion to create a 300-megawatt campus featuring up to seven data center buildings with an on-site power substation.
At that time, revealing its ambitions to become a long-term player in the global market for digital infrastructure, the firm announced that the site would be developed in phases, with the first phase expected to include two 260,000 SF buildings with 35 MW of power each.
TA Realty's new leasing announcement coincides with the formation of a new group at the firm dedicated to digital infrastructure, to be formally announced in early 2024.
The Sweet Spot
The project development site, which is situated on the east side of Sycolin Road and is bound by Cochran Mill Road to the north and Energy Park Drive to the south in Leesburg, is strategically positioned atop major fiber routes and alongside transmission lines.
“Leesburg is west of (Ashburn), but we are still in the sweet spot for fiber and utilities. This was probably the last remaining large parcel where you can build a campus,” said O’Rourke, as quoted in earlier DCF reporting on the development.
In recent years, more developers have been building campuses near Leesburg, located about 10 miles west of Northern Virginia’s primary data center hub in Ashburn.
The growing Leesburg cluster is part of the evolving geography of the data center market in Northern Virginia, which, at roughly 3x the size of the next largest data center market in the world, is the industry's center of cloud computing infrastructure.
The largest data center cluster is in Ashburn’s “Data Center Alley,” a key connectivity hub that has been the focus of frenzied data center development. With a shrinking supply of land parcels in Ashburn, developers have shifted their focus to nearby towns such as Leesburg, Dulles and Manassas that can offer land and power capacity.
The TA Realty project site is situated between a Google data center and the site of a Microsoft cloud campus near the Leesburg Executive Airport. To the south is a new campus for Compass Datacenters, a wholesale data center provider who often works with hyperscale players.
In addition to access to diverse fiber connections, TA Realty said the project's Leesburg location is ideal for data center development due to an adjacent power plant, logistics facility, and an existing substation that provides power to another data center facility.
TA Realty expects to commence construction of the site’s first building later this year. The company said the cloud tenant selected TA Realty’s data center campus due to its scale, power advantages and location near the heart of Data Center Alley.
Construction on the secure campus is expected to be completed in 2027.
Speaking about the proposed development, Buddy Rizer, Executive Director of Loudoun Economic Development, remarked, “Loudoun County is excited to welcome TA Realty and to support the development of one of the largest new data center campuses approved and planned for our county."
Rizer added, "In addition to bringing more data center capacity to the region, TA Realty’s commitment to the community is illustrated through the company’s investment in bringing a new water pump station to the site, improving the quality and distribution of water to our entire community.”
As Loudoun County is home to the largest concentration of data centers in the world, Northern Virginia also accounts for approximately half of all built data center space in the U.S., per CBRE estimates.
TA Realty said that once complete, its Leesburg campus will be "among the largest and most modern campuses in the area."
Flexible Design
O’Rourke said TA Realty is using a flexible design that can support either hyperscale or enterprise tenants, and is mindful of the growing focus on sustainability.
“The buildings are designed to be LEED Gold,” said O’Rourke. “We are mindful of demand for renewables and want to offer as much flexibility as we can to our tenants to get the kind of power that they want.”
This August, the Leesburg Council adopted two amendments to the town zoning ordinance designed to better accommodate the needs of the data center industry, which is expected to significantly boost the town’s commercial tax base in coming years.
As reported by Loudoun Now, the council made changes to the town's I-1 (industrial/research park) zoning district to allow buildings taller than 50 feet. "The new 65-foot height limit would apply to all buildings permitted in the district but was developed with data centers in mind," reported Loudoun Now's Norman K. Styer.
Styer's story added, "The change was proposed after the town received a request concerning two undeveloped lots southeast of East Market Street and Crosstrail Boulevard near Village at Leesburg. In all, the change would impact 39 parcels totaling just over 300 acres. I-1 zoned land is located near Leesburg Executive Airport, in the Trailview Boulevard/Russell Branch Parkway corridor, and at the corner of Edwards Ferry Road and Battlefield Parkway."
In August, the Leesburg Council also adopted a comprehensive set of design standards that will be applied to all data center proposals, addressing detailed requirements for features such as architectural design elements, screening and walls, noise limits, mechanical and electrical screening, and lighting.
According to Loudoun Now's Styer, the new standards are designed to provide clear guidance to data center developers, while also ensuring that projects in compliance can move forward "with only a staff-level review."
'Only Scratching the Surface'
TA Realty is a newer entrant to the Northern Virginia data center market. Announced in 2021, the Leesburg project represents the first step in a larger push into the digital infrastructure market by the firm, a private equity investor with lengthy experience in commercial real estate.
Owned by the Mitsubishi Real Estate Group, TA Realty manages more than $30 billion of real estate assets. As previously noted at Data Center Frontier, the company joins a growing group of new investors targeting the data center sector, seeking a stake in the rise of a global economy powered by digital infrastructure.
“This is a sector that our firm has been watching for quite some time,” said O’Rourke. “We like the space for a number of reasons. The most obvious is that collecting and processing data is really the future of our entire economy, and that’s driving data center growth. I think we’re only scratching the surface of where that goes.”
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