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Loudoun County data centers go vertical as land prices rise and options decrease

• Northern Virginia has the most data centers of any market in the world. As more are built, there is less land available, which sends land prices up. In 2017 alone, Google acquired 148 acres in two separate purchases, Sentinel Data Centers purchased 65 acres from AOL and QTS purchased two parcels across 52 acres. In total, these purchases removed 265 acres from the market and helped push average land prices to above $400,000 per acre, roughly four times higher than county land values in 2010.

• Only four two-storied data centers existed in Loudoun County through 2013, while there were 21 single-story data centers. Yet with land options shrinking, which is pushing up pricing, and demand still escalating, developers have begun to go vertical.

• Of the multi-tenanted data centers built since 2014, only three have been single story, while 11 have been two stories; QTS is currently building the first three-story MTDC in Loudoun County.

• This trend of going up for non-office, residential, retail or hotel uses is becoming more relevant as land opportunities diminish. In land constrained urban industrial markets such as Seattle, San Francisco, Chicago and New Jersey, this is highly relevant and will only grow in Northern Virginia’s data center alley in Loudoun County and increasingly in peer markets such as Prince William County. ​

Source: JLL Research

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