JV Buys $100M Site for Landmark Data Center

Image by Taylor Vick via Unsplash

Quantum Loophole Inc. and TPG Real Estate Partners have formed a joint venture to take the data center industry into new territory with the development of the first clean, mass-scale gigawatt data center community.

As part of the establishment of the joint venture, TPG purchased a minority interest in Quantum Loophole, which aided the partnership’s $100 million acquisition of the former Alcoa Eastalco Works site, a roughly 2,100-acre property in Frederick County, Md., that will serve as home to the data center development.

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A young data center developer that made its debut in January 2020, Quantum has been planning the next-generation clean cloud community project for over a year. The data center market is primed for it, the company asserts.

“Quantum Loophole firmly believes that a master-planned approach offers an expedited time to market, an immense amount of scale that results in cost-effective deployments, and big picture thinking that ensures an environmentally sound and symbiotic approach to design that is mindful of local community needs as well as the industry and ongoing environmental concerns of such large-scale data center developments,” a spokesperson for the Quantum-TPG joint venture told Commercial Property Executive.

Quantum had been on the hunt for the right location for the endeavor for quite some time until it discovered the Frederick County acreage after contacting the State of Maryland following the announcement of new data center tax incentive regulations, which passed in July 2020.

Quantum and TPG purchased the Frederick County property, utilized for smelting until it closed in 2010, from Alcoa Corp. The seller had been committed to the site’s future as a productive locale for the community and has spent the last decade preparing it for its second incarnation. Alcoa accomplished its mission; the site, which spans more than 3 square miles, has been fully remediated and is presently ready for redevelopment.

Tomorrow’s data center today

The first-of-its-kind data center will not only sit less than a millisecond by fiber from the Internet ecosystem of Northern Virginia, the top data center market in the world, but it will also embrace sustainability and efficiency in their entirety—including power use and distribution, fiber connectivity, and construction cost efficiencies. The building will feature an efficient design for effective water and power use, and it will focus on the surrounding nature to protect views and reduce visibility from public roads.

However, everything will not exactly be cutting-edge at the data center campus. “(The property) includes a historical manor house which will be retained and redeveloped,” the spokesperson told CPE. “We plan to keep the building’s historical look intact while converting the farmhouse to office space and other space useful by the Quantum Loophole team.”

The next step for Quantum and TPG is to work with the local planning board and other municipal boards to obtain the requisite approvals for the undertaking. As landholder and developer, Quantum will make the Frederick County campus available for sale to other data center projects. The entire property will take approximately 10 years to reach full build-out.

In the meantime, Quantum continues to seek other properties that could be developed based on the company’s master-planned approach to data center construction.