Americas Data Center H2 2024 Update

VIRGINIA AMERICAS PRIMARY MARKET

FREDERICK

ASHBURN + LEESBURG

KEY INDICATORS*

MANASSAS

CULPEPER

5,926MW In Operation

924MW 2024 Colo Leasing

FREDERICKSBURG

1,834MW Under Construction

1.5% Colo Vacancy

RICHMOND

Colo

*Definition: Key indicators are based on operational Hyperscale Cloud, Colo, Edge & Telco data centre facilities in the market and excludes Captive & ICT.

Hyperscale Self-build

MARKET OVERVIEW Virginia continues to see high levels of growth and tight market vacancy with limited availability in operational data centers. To satisfy their demand, occupiers are largely looking for data centers currently under construction or in the planning stages. Operators have remained bullish on the world’s largest data center market and continued their trend of expanding pipelines despite the many challenges surrounding land and power availability in the Virginia market. Currently, 1.8GW of capacity is under construction, with 89% preleased, while 15.4GW is in the planning stage, with 9% preleased. At 1.6%, vacancy is extremely tight, but it only partially explains the tightness of Virginia’s data center marke,t as it largely consists of small amounts of available capacity spread across numerous data centers. For example, the largest available capacity in a single operational data center in the entire state is 10.0MW, located in Richmond. Beyond that, only two operational data centers offer more than 5MW, while nine have between 1MW and 4.9MW available, and 31 have less than 1MW. Many occupiers currently in the market are looking for more contiguous capacity than the market can support, which is why their attention has turned to the development pipeline. Land constraints are another significant challenge, driving up land values and pushing transactions farther from the NoVA core. However, established submarkets, like Ashburn, still have available parcels. Operators seeking to capitalize on the submarket’s extensive data center infrastructure are paying over $4 million per acre. Despite the high cost, data center land transaction activity is still prominent throughout the state, even as power delivery timelines for new data centers extend beyond 2029. However, while there is a high degree of speculation activity for land between Fredericksburg and Richmond, land acquisitions in this area are currently hindered by labor constraints for transmission infrastructure upgrades needed for further data center development. Power constraints continue to be the norm in Virginia, as Dominion Energy, which supplies the area with power, has struggled to meet growing power demand from existing data centers and those currently under construction. However, long-term relief may come as nuclear power gains traction, the viability of small modular reactors becomes clearer, and Dominion strengthens its transmission network while advancing plans to increase generation and improve transmission infrastructure.

ECOSYSTEM DEVELOPMENTS

• Stack Infrastructure recently purchased 504 acres from Peterson Companies at the Stafford Technology Campus, becoming NoVA’s second-largest land deal. Peterson Companies had previously secured rezoning approval to allow the development of a hyperscale data center facility. Stack will build a data center for a hyperscale client on the site. • Yondr officially completed and launched its first data center on the company’s campus in Loudon County. The data center is 48MW in size, and an additional 48MW is currently underway as the second phase of construction began. • TPG Real Estate and Quantum Loophole separated and will no longer develop the Quantum Frederick Project as partners. TPG-owned Catellus Development corporation will be the sole developer of the project going forward. At full buildout, the 2,100-acre campus is planned to have 2GW of capacity. • Dominion Energy and Amazon entered a memorandum of understanding to explore nuclear energy development in Virginia with small modular reactors. This trend of using small modular reactors to power data centers is becoming more common nationwide as power constraints persist in many markets. • QTS made two land acquisitions totaling 928 acres, including a 620-acre site in Sandston and a 308-acre site just outside of Martinsburg, West Virginia. • Stack Infrastructure recently received zoning approval for their data center campus site in Gainesville. Once built, the campus will have 108MW of capacity and span 815 thousand square feet. Stack also recently expanded its presence in Loudon County with a 36-acre land acquisition in Leesburg. • Aligning with the trend of NoVA data centers expanding outward, Rowan Digital secured 151 acres of land in Frederick, Maryland, where it plans to build single-tenant data centers. • Amazon’s proposal for three new data centers was shelved indefinitely by the Prince William Board of County Supervisors, citing noise pollution, the concentration of existing data centers, and redevelopment plans. In other news, a company linked to Amazon, Minnieville Capital Acquisitions LLC , acquired 39 acres in Manassas. • Iron Mountain has been active across Virginia, recently acquiring 40 acres in Manassas for a two-building 150MW project. The company also filed to expand its Manassas campus on Wellington Road with the VA-8 facility and purchased 66 acres in Henrico County’s White Oak Technology Park, which will support more than 200MW of capacity.

CUSHMAN & WAKEFIELD | AMERICAS DATA CENTER MARKET OVERVIEW