First Data Center Project Topped Out

PowerHouse Data Centers, a joint venture of American Real Estate Partners (AREP) and Harrison Street, has topped out ABX-1, its first data center project in Northern Virginia. The powered shell was built by DPR Construction. It measures 265,850 square feet and will initially provide 60 megawatts. The first occupants are expected in July, while final completion is scheduled for October.

The joint venture partnered with Dominion Energy to construct a dedicated, 300-megawatt power substation on the 10-acre site. This will enable the operator to scale up the total available power to 80 megawatts. Groundbreaking for the substation is expected soon, with delivery planned for 2026.

PowerHouse is aiming to leverage AREP’s real estate connections to disrupt the market through several methods. They include “buying existing properties and scraping/retrofitting them into reimagined powered shells to fulfill hyperscaler precise specifications, being the first in this market to make room for new hyperscalers with out-of-the-box real estate deals, utilizing AREP’s long-standing relationships and development expertise to secure future sites before they come on the market and addressing the power issue by offering on-site substations in partnership with the local energy authority and data center community,” Luke Kipfer, vice president of data center development and construction at PowerHouse, told Commercial Property Executive.

PowerHouse’s first NoVa data center

ABX-1 is a two-story building located at 21629 Beaumeade Circle in Ashburn, Va., adjacent to Loudoun County Parkway, within the region’s Data Center Alley. Data halls can be configured to measure up to 79,600 square feet per floor, at power densities ranging from 225 to 310 watts per square foot. Clients will have access to the region’s rich fiber infrastructure, with 25 fiber providers available, as well as to all major cloud providers, multiple interconnection hubs and internet exchanges.

The joint venture tapped Avison Young to market the property, targeting hyperscale users. Principal Rob Walters and Data Manager John Andril are the brokers for ABX-1, with leasing efforts already underway.

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A $1 billion commitment

Construction activity at ABX-1. Photo courtesy of PowerHouse Data Centers and DPR Construction

PowerHouse’s first development in Ashburn is part of the company’s plan to construct 2.1 million square feet of data center space in Northern Virginia. AREP and Harrison Street announced the joint venture last year, kicking it off with a $1 billion investment.

In Ashburn, the joint venture is planning a total of four data centers—the ABX-1 facility and an additional campus—while two additional facilities will be constructed in Arcola.

The Ashburn campus will include the redevelopment of the former AOL headquarters on Pacific Boulevard into a three-building data center campus named PowerHouse Pacific. The 1.1 million-square-foot project will provide 265 megawatts at maximum capacity across 716,170 square feet of data halls. It is slated for completion in 2026.

PowerHouse Arcola will comprise two data centers with a maximum capacity of 120 megawatts across 364,100 square feet of data halls. The buildings are set to come online in 2025 and 2026.

Sustainable construction

PowerHouse joined the Infrastructure Masons Climate Accord in January this year. The membership represents a commitment to use sustainable data center design, construction and operation practices, along with transparent ESG performance reporting.

In constructing ABX-1, approximately 11,000 tons of concrete from the previous building were crushed on-site and reused, along with 387 tons of metals recycled from other buildings. “We’re committed to reducing our data center carbon footprint by using renewable energy sources, implementing energy-efficient design and utilizing sustainable construction practices and materials such as low-carbon concrete, where feasible,” Kipfer told CPE.

Entering the high-barrier NoVa market

In a recent Cushman & Wakefield comparison report, Northern Virginia ranked first for three years in a row. However, this year’s ranking witnessed a tie between this market and Portland due to rapid growth in the Hillsboro area.

The region remains a top destination for developers due to its access to low-latency fiber and dense interconnection potential. Even so, demand continues to outpace supply in the market, which recorded under 1 percent vacancy by the end of 2022, according to the report.

However, the market is not without issues. Developable land is scarce, and developers pay premium prices to build here. Power availability also became a concern recently, with talks of halting new data center construction in Loudoun County, due to limitations in providing electricity. This led developers to target other Virginia markets such as Gainesville, Bristol, Culpeper, Manassas and Richmond.

PowerHouse is one of the two latest entrants to the largest data center market in the U.S. Other recent developments in the region include CorScale’s debut, a 300-megawatt facility in Gainesville, according to Data Center Dynamics.

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