Principal Asset Management sold a data center in Alpharetta, Georgia, for $253 million this month, pulling in nearly four times the acquisition cost after three years of ownership in a sign of demand for the property type.
The company is exiting the property after the surging appreciation in a national market that's been heating up with the need for real estate that can support the increasing use of artificial intelligence.
Greater Atlanta emerged as the national leader for data centers in terms of net absorption, the amount of space leased compared to the amount vacated, by achieving 705.8 megawatts in 2024, according to the real estate firm CBRE. Through the first half of this year, the market has absorbed another 280.5 megawatts, CBRE said. The data center sector uses power capacity, measured in megawatts, rather than square footage to track its activity.
The combined absorption of 986.3 megawatts running continuously for a year generates enough electricity to meet the annual needs of roughly 800,000 typical American households.
Principal entered the Atlanta market just as demand was accelerating, spurred partly by the growing demand for systems to support artificial intelligence.
The Des Moines, Iowa-based investment firm acquired the single-story Ascent Data Center in August 2022 through a joint venture with Lincoln Rackhouse for $63.6 million, according to CoStar data. GI Partners purchased the property for $253 million — a nearly 300% increase in value.
"Our data-driven approach to asset selection and value enhancement capabilities allow us to capitalize on markets with significant potential growth," Devin Chen, head of private equity real estate portfolio management at Principal, said in a statement. “We substantially increased the site’s power capacity, further meeting the demand of today’s tenants. Principal continues to see strong opportunities across the data center market and remains committed to investing in high-quality, strategically located assets.”
During its ownership, the firm executed extensive upgrades to the building, which was originally constructed for a telecommunications company in 2009. The improvements nearly quadrupled the site's power capacity from 4.05 megawatts to 15.2 megawatts.
The facility currently serves two tenants: a Fortune 100 financial services firm and a high-performance computing company — both sectors driving strong data center demand. The property sits on excess land that allows for future expansion.
Alpharetta ranks among Atlanta's largest data center markets, attracting technology firms seeking connectivity and proximity to the metro area's digital infrastructure.