Digital Realty Developing New Data Center at Ashburn Campus

ASHBURN, VA-There will be some 600,000 square feet of data center space entering the Loudoun market in 2014, according to Jones Lang LaSalle's calculations. One project contributing to this capacity is a data center underway at Digital Realty's local campus. The San Francisco-based REIT already has the shell underway and it is expected to deliver the first phase in Q3, Dana Langston Adams, vice president of portfolio management, tells GlobeSt.com.

Called Building K, it will be a state-of-the-art data center facility of 280,000 square feet supporting 19.2 MW of critical IT load. The building will offer such amenities as office space, storage space, meeting rooms and break rooms.

"We are moving forward with this based on the strong demand we have seen in the market," Adams says. It is a big project for the REIT, which is a conservative investor in development, she says.

Northern Virginia, however, is its second largest market in the US. The REIT houses some 2 million square feet of data centers in Loudoun County alone, with a total of 2.7 million square feet in Northern Virginia. Demand for the data center capacity comes from a wide array of industries, Adams says, including financial services, web hosting, social networking companies and cloud service providers. "We also support government requirements and corporate services as well."

Digital Realty is just now beginning to publicize its new space, Adams says. Once this facility is filled the company will carefully consider its next expansion. "We don't want to over extend ourselves in any given market, so probably we would build on the expansion capability we already own in the Ashburn campus. But that would be a 2015 decision," she says.

That point will likely come sooner rather than later. At an investors' conference last year CEO Mike Foust told the audience that Northern Virginia was the REIT's highest market in terms of lease signings in 2013 "and there's more to come."

Data centers, in fact, have overtaken office in Loudoun County's construction pipeline, according to JLL. That 600,000 square feet of data center space set to deliver this year swamps a paltry-by-comparison 100,000 square feet of office space coming online this year.

It is a trend that began in 2009, JLL notes. Since then, more than 1.42 million square feet of data center space has delivered compared to only 225,000 square feet of office space.

--Chart courtsey JLL.