Office real estate investor American Real Estate Partners (AREP) has acquired land and plans to build a new data center in Northern Virginia’s data center alley.

Virginia-based AREP has partnered with alternative real estate investment firm Harrison Street and aims to build a two-story, 265,000 sq ft (25,000 sq m) “powered shell” data center on a 10.3-acre site in Ashburn, Loudoun County

The firm reportedly paid $21.5 million for the site at Beaumeade Circle, and construction to due to start later this year.

“Our newest site at Beaumeade has all of the elements data center users are seeking with its extraordinary location and access to power and fiber. This project can be delivered on a fast track basis, which [the] market certainly needs,” said AREP CEO Doug Fleit.

The 21455 Beaumeade site was previously owned by Chirisa Investments, which bought the site in 2018. The firm had planned to build a 280,000 sq ft (26,000 sq m), 30MW data center on the site.

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Virginia remains data center hotbed

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

Largely known for operating in the office real estate space, AREP owns properties across the east coast, including Virginia, Maryland, Pennsylvania, and New Jersey. The company will reportedly be making further data center investments in the future.

“We have other opportunities planned in the data center and connectivity sector, which has become a significant part of our long term strategy, and anticipate to make other announcements in the very near future,” Fleit told Bisnow.

Despite already having the highest concentration of data centers in the world, interest in Virginia continues unabated. More than 500MW was leased from Northern Virginian colocation facilities in 2020, according to a North American Data Centers report. Equinix, Vantage, and Aligned Energy are just a few companies that have announced construction or expansions of data centers in the Ashburn area over the last 12 months.

This is Harrison Street’s second data center investment in January after the firm partnered with 1547 Data Center Real Estate Fund to buy The Pittock Block.