JK Land Holdings Plans Northern Virginia Data Center
The firm paid $60 million for the development site.
JK Land Holdings has purchased a 25.3-acre asset in Ashburn, Va., where it intends to build a 360,000-square-foot data center. Finmarc Management sold the property for $60 million. KLNB and CBRE represented the buyer and the seller, respectively.
Finmarc had purchased the asset in 2019 for $26.1 million, funding its acquisition with a $20.1 million loan issued by City National Bank of West Virginia, CommercialEdge data shows.
The property currently encompasses a three-story, 110,000-square-foot office building and a nearly 80,000-square-foot R&D/warehouse structure. Telos Corp. is the sole tenant, having occupied the entire property since 1988. According to its most recent annual report, the lease will expire in 2029.
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The land is fully entitled for data center use with approval from Loudoun County. According to the filed plans, the facility will include 20 generators and a dedicated substation. However, JK Land Holdings Chairman Chuck Kuhn claimed that the company will make a final decision once Telos exits the lease, as reported by Washington Business Journal.
Located at 19886 Ashburn Road in Loudoun County, the site is some 35 miles from downtown Washington, D.C. TA Realty’s upcoming 1.9 million-square-foot data center, which the firm fully leased to a global cloud service provider last year, will operate less than 6 miles away.
KLNB Commercial Real Estate Broker and Principal Ryan Goeller represented JK Land Holdings while CBRE Vice Chairman Rob Faktorow and First Vice President Josh Greenberg alongside Vice President Anna Faktorow led the negotiations on behalf of Finmarc.
Northern Virginia continues to dominate U.S. data center sector
Keeping up with increasing data center demand, Northern Virginia’s inventory grew 18 percent year-over-year as of March 2024, according to a CBRE report including statistics for the first four U.S. primary markets: Northern Virginia, Dallas-Fort Worth, Chicago and Silicon Valley. The region’s vacancy rate dropped 90 basis points to 0.9 percent in March, the lowest in the nation.
The report goes on to show Northern Virginia’s average monthly asking rates for a 250- to 500-kW requirement grew by 41.6 percent year-over-year at the end of 2024’s first quarter. The region outperformed the average of those four markets, which grew by 20 percent during the same interval.
New rules for Loudoun County data center development
As power remains undersupplied, an issue amplified by a scarcity of developable land, a new local zoning ordinance dampened Virginia’s supply pipeline further. In December 2023, Loudoun County adopted a zoning ordinance that includes changes to the approval process.
This new ordinance aims to reduce impact upon residential properties that neighbor data centers by implementing standards for soundproofing roof-tops, noise studies, limited generator testing hours, among others.
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