When it comes to data center locations, North Virginia is the most popular kid in school.

According to Dgtl Infra, Virginia has over 300 data centers, and of this total, 90 percent or 275 data centers reside in Northern Virginia, including Loudoun County, Prince William County, and Fairfax County.

Located in the east of Loudoun County, that puts Ashburn right in the heart of the popular clique.

We talked to Luke Kipfer, VP of data center development and construction at AREP/PowerHouse Data Centers, in a DCD>Talks about their experience working in the area.

American Real Estate Partners AREP-Ashburn Virginia -DataCenter.jpg
– American Real Estate Partners

PowerHouse Data Centers acquired land in Ashburn for a new data center development back in 2021. Land which, prior to the acquisition, was used as the old AOL world headquarters.

“It was built as a commercial office,” explained Kipfer to George Rockett, DCD. “But when you look at the needs of a hyperscaler, their deployments really need to be purpose-built. There are very specific requirements, even structurally for these buildings.

“So while the redevelopment of some assets makes sense from a connectivity or even a retail colo standpoint, when you look at the way that hyperscalers are deploying their compute needs, they really need to be purpose-built facilities.”

For PowerHouse Data Centers, its goal is to build a site, lease it out, and move on to the next project. For the majority of those facilities, the company sees them going to a single user.

“We really see the old AOL world headquarters as a full campus for a single user. So that would likely be three buildings delivered sequentially for one company, and that's just the most efficient use of space. Certainly, in Ashburn, there are users that are looking to take up over a million square feet of data center space in one go.”

How PowerHouse Data Centers goes about doing this varies. The company offers a ‘PoweredShell’ product, where they find the site, do the zoning entitlements, bring power and fiber to the location and any other needs like water, and build the structure of the building. Whoever leases the space would then do the fit-out according to their needs.

Alternatively, the company does the entire process including installing the MEP and infrastructure, leaving the client to simply roll in their cabinets.

In a market like Northern Virginia, where the data center industry is so saturated, simplifying your offering is key to success. But that saturation also brings with it many issues.

“In the Ashburn-proper area, power has been an issue since fall last year, when Dominion came out with power constraints. It was a big hit when it happened, but we've been able to adjust and pivot to what we need to be able to deliver our projects. And Dominion’s got a plan for power problems to be solved, and they're executing that plan.”

The power constraints in question saw Dominion Energy stating that it couldn’t guarantee that it could provide the power needed for the data center population in Northern Virginia, and those power constraints were particularly noticeable in Prince William County.

Prince William County has seen a huge scale of growth, meaning that a lot of new players have been using the grid. Comparatively, Ashburn is relatively stable.

“When you look at that, there are no sites left in Ashburn that can support the data center developments that have a low cost of entry. So it's either paying a premium for a site that is zoned to be developed into a data center, or it's really forcing people to get creative in terms of how they're building sites,” said Kipfer.

This limitation on development is bringing some resolution to the power struggle, but it is still something that developers must consider going forward. Northern Virginia remains the most popular location for data center developments in North America, but the region is reaching a breaking point. So where will take over the reins?

Learn more about PowerHouse Data Center’s developments in Virginia in the DCD>Talk with Luke Kipfer now.