Real estate firm JLL鈥檚 quarterly report on global data centers once again ranks Northern Virginia as the world鈥檚 largest data center market. And by a long shot.
At the end of the first quarter, Northern Virginia鈥檚 data center inventory topped 4,900 megawatts. Data centers are generally measured by computing power, not size. But it translates into a major footprint.
鈥淔our thousand nine hundred megawatts, give or take, is about equivalent to about 50 million square feet. To compare that to the Northern Virginia office market, it is about 140 million square feet. Northern Virginia is almost five times the size of any other market in the U.S.,鈥� said Matt Gallagher, senior managing director at JLL鈥檚 Tysons, Virginia office.
Another 1,100 megawatts of data center space is currently under construction in Northern Virginia, according to JLL, with almost 5,500 new megawatts of data center space planned.
Almost all of that new data center space under contraction or planned in Northern Virginia is already spoken for.
鈥淢ore than 90% of the inventory that has power agreements, and obviously the ability to build the building, site plan approval et cetera, is committed through 2026, 2027 and almost getting into 2028. So there is a functional vacancy rate that is below 1%,鈥� Gallagher said.
Data centers require close access to the power grid, but expanding utility lines to more rural areas is becoming increasingly contentious. JLL鈥檚 report said potential zoning changes and increasing public resistance to construction in counties such as Fairfax, Loudoun and Prince William have intensified competition for development sites, impacting availability. So developers are migrating southward.
鈥淩ight now, we are seeing a tremendous amount of activity upend down the I-95 corridor between Washington and the Richmond market. You want to have adjacency to high-voltage transmission, public sewer and water. And you obviously want to have entitlement. You want to be able to build the data center,鈥� Gallagher said.
Peak land prices have increased 45% in the past year in Loudoun County and 38% in Prince William County. In the Leesburg area, prices for suitable data center development have more that doubled.
Data centers face public resistance beyond just electric grid expansion and rural intrusion. They are not always aesthetically attractive. County leaders are becoming more sensitive to that.
鈥淭hey have very strong opinions about what they are supposed to look like. If they are incorporating glass into the facades and they are trying to make them as aesthetically pleasing as they can. Height is something that there is some pushback on by residents. All of the major counties are addressing the concerns from constituents about appearance, noise, et cetera,鈥� Gallagher said.
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