Digital Realty Plans Huge Expansion in Ashburn

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One of the new Digital Realty Trust data centers in Ashburn, Virginia. The company continues to expand its Loudoun Exchange campus. (Photo: Rich Miller)

Digital Realty plans to build a 400,000 square foot data center at its Digital Loudoun campus in Ashburn, Virginia, the company said Wednesday. Digital Realty will invest at least $150 million in the new facility by 2015 and create 50 new jobs, allowing it to qualify for tax exemptions under Virginia's newly beefed-up incentives for data center development.

The new project will be the eighth data center at the company's campus in Loudoun County, which is home to more than 5 million square feet of data center space, according to local officials.

"We're very pleased that Digital Realty, with more than one million square feet of space, is the largest data center operator in Loudoun County," said Buddy Rizer, Assistant Director of the Loudoun County Department of Economic Development. "And we look forward to the completion of their newest building, a 400,000-square-foot facility that will ultimately house 22 data centers."

Incentives Boost Industry in Virginia

Digital Realty is the most recent company to take advantage of the sakes and use tax exemptions for data centers, following in the footsteps of RagingWire, DuPont Fabros and Capital One

"The abundant data center infrastructure in Virginia, as well as our Sales & Use Tax Exemption Incentive for data center owners and their tenants, are major benefits that put us at the forefront of this booming industry." said Virginia Governor Bob McDonnell. "This significant relief on computer equipment effectively lowers the total cost of ownership and operation, and enables Digital Realty and its customers to continue to grow and thrive in the Commonwealth.”

“The sales tax exemption is really a boon for our customers with data centers located in Loudoun Country – already one of the most attractive data center markets in the country,” said Michael Foust, Chief Executive Officer of Digital Realty. “The significant relief we and our customers expect to receive effectively lowers the total cost of ownership of our data centers in the area. We are very excited about this development and believe it further establishes Virginia as a key hub for companies seeking to locate or strengthen their east coast data center footprint.”

Building Again in Ashburn

Digital Realty's announcement accelerates the building boom in Ashburn, a section of northern Virginia which is perhaps the most connected piece of Internet real estate in the United States, housing servers for Facebook, Amazon, Rackspace, Google, Microsoft and hundreds of other companies.

DuPont Fabros Technology recently began development of ACC7, a 41 megawatt data center on its huge campus in Ashburn. The 11.89 megawatts first phase is expected to be delivered in the second quarter of 2014. Meanwhile, Corporate Office Properties Trust (COPT) is building two large data centers in Ashburn’s “Data Center Alley” that are bpth fully leased to “a subsidiary of an investment-grade Fortune 500 company,” which is reported to be Amazon. The 200,000 square foot first facility will come online late this year, with an additional 115,000 square foot building following by mid-2014.

In addition to the new construction, DBT Data is marketing several powered-shell properties, and RagingWire and Sabey Data Centers have both announced plans for future projects.

Digital Realty's 122 properties, excluding three properties held as investments in unconsolidated joint ventures, comprise approximately 22.7 million square feet as of April 26, 2013, including 2.6 million square feet of space held for development. Digital Realty's portfolio is located in 32 markets throughout Europe, North America, Asia and Australia.

Data Center Knowledge's Rich Miller contributed to this story.