A pair of just-closed large land deals, including one by technology giant Amazon, in Northern Virginia for data center campuses show companies are willing to shell out millions for tracts needed for the in-demand but at times criticized high-tech facilities.
In one transaction, online retail giant Amazon paid $700 million for a site in Prince William County’s Bristow community, according to public records filed this past week and CoStar data. In the other, an affiliate of SDC Capital Partners, a global digital infrastructure investor, paid $615 million for land in the Loudoun County town of Leesburg, according to public records and CoStar research.
Northern Virginia has emerged as the world's largest data center market, based on the inventory measured in megawatts — and in this case, gigawatts — as the world's largest technology firms grab land that's been zoned for development of the power-hungry facilities. Companies ramping up their artificial intelligence and machine learning platforms have created much of the appetite for data center space.
The Northern Virginia data center market has 3.4801 gigawatts of inventory, topping all others when it came to demand for space in the first half of the year, according to a report from real estate services firm CBRE. Through June 30, Northern Virginia recorded an 80% surge in under-construction capacity, CBRE said.
“I've never seen higher demand, a stronger demand or more demand for data in the Northern Virginia marketplace,” Chuck Kuhn, founder of Sterling, Virginia-based JK Moving Services, told CoStar News in a phone interview. An affiliate of JK Moving sold the Leesburg site. Kuhn declined to comment on the terms of the transaction.
Kuhn said the combination of demand largely created by AI, coupled with a shortage of viable remaining sites for data centers, has resulted in a race to grab prime development locations.
Nearly 40% of the industrial supply completed in metropolitan Washington, D.C., since 2020 has been for data centers, virtually all build-to-suit projects for specific occupiers, according to a CoStar Market Analytics report. The report also said the vacancy rate for data center space in the region is less than 1%.
Amazon, others expand Virginia data center space
Amazon acquired the development site of nearly 188 acres in Bristow that's part of Devlin Technology Park from Reston, Virginia-based homebuilder Stanley Martin Homes, CoStar data shows. Neither Amazon nor Stanley Martin immediately responded to requests for comment.
The land Amazon bought is a section of a larger 270-acre site, the Washington Business Journal reported, that Stanley Martin assembled a few years earlier for $51.3 million.
The Prince William Board of County Supervisors rezoned the site in November 2023, and a legal battle ensued that made its way up to the commonwealth's court of appeals. The higher court upheld a decision to allow the county's rezoning for the development of data centers.
The site acquired by the affiliate of New York-based SDC Capital totals about 97 acres, CoStar data shows. SDC didn't respond to an email request for comment. JK Moving Services had assembled the site a few years earlier via purchases totaling $57 million, according to reports.
“There’s a lot of advantages of being in Virginia," Kuhn said. "Data centers like data center neighbors."