Sabey Launches First Building in Booming N. Virginia Data Center Market

Sabey Data Center Properties, the Seattle-based wholesale data center developer, has completed and tested its first Northern Virginia data center. The facility is the first of three the company is planning to build at its Intergate.Ashburn campus, which at total build-out is expected to be 900,000 square feet large, with capacity to support about 70MW of power.

While Sabey has had East Coast presence since 2011, when it acquired the Verizon tower in Manhattan, this week’s announcement marks its first foray into Northern Virginia, North America’s biggest and most active data center market. Data center space is in high demand in Ashburn, where much of the region’s data center capacity is located, and Sabey has already signed a tenant for a 1.8MW, 12,000-square foot quadrant in the newly finished building, whose total capacity is 7.2MW.

The developer did not disclose the tenant’s name. Robert Rockwood, Sabey’s head for the eastern region, told us in an interview last year, as the first building was still under construction, that numerous existing customers who are using space in Sabey data centers in Washington State and New York, were interested in Northern Virginia data center capacity.

Customers leased 84.4MW total in 2016 from data center providers in Northern Virginia, according to a recent market report by the commercial real estate company CBRE Group. That’s not counting several pre-lease deals that were signed 2016 but were not due to be delivered this year. Those deals would bring the region’s 2016 total to about 140MW.

The Dallas-Fort Worth market was second in total absorption last year, with 37.6MW of data center capacity leased, and Chicago was third, with 36.2MW, according to the report.

Together, data center providers in major US markets signed leases for 195MW of capacity total. Those markets are Atlanta, Chicago, Dallas-Fort Worth, New York-New Jersey, Northern Virginia, Phoenix, and Silicon Valley. That number represents a slight decline from absorption the previous year, when companies leased out 200MW of capacity in those markets.

Most of the data center leasing momentum across the country was fueled by hyper-scale cloud service providers, and that was especially true in the Northern Virginia data center market. In a statement, Jamie Jelinek, CBRE’s senior associate for Data Center Solutions, said:

“With the Ashburn area’s prominence as one of the most densely connected fiber-rich areas in the U.S., cloud service providers have dominated a significant portion of leasing in the region. In most cases, cloud provider requirements are being deployed in third-party facilities. Some of this is speed-to-market-driven to meet immediate customer needs. But it is also part of a larger ‘active-active’ cloud infrastructure strategy where redundancy needs are shifted away from each individual data center and spread out to the network and application level.”