The price of vacant land in some parts of Prince William County is nearing $1 million per acre as data center developers look to capitalize on the Northern Virginia region’s quickly expanding data center market, according to county officials.
“They are just building like crazy,” said Tim Leclerc, Prince William County’s assistant finance director. “We’ve seen land purchases on a per acre basis up in the Loudoun County area that are approaching $2 million. We’ve seen them approaching $1 million here.”
Leclerc told the Prince William Board of County Supervisors in March that vacant land assessments rose 15% overall in 2020 – the highest one-year jump in assessments in more than a decade. In areas of Prince William where data centers are allowed by-right, Leclerc said vacant land assessments rose 103%.
Data centers typically require larger parcels of land, upwards of 20 acres.
The rapid increase in assessments is “being driven principally by developers and speculators who are scooping up land as fast as they can because they know data centers are willing to pay just about any amount for it,” Leclerc told the board.
Vacant land assessments exclude farmland and tax-exempt properties. Vacant land currently comprises about 2.6% of the county’s total landmass.
In a follow-up interview, Leclerc said sales of vacant land within the county’s data center overlay district – located in areas with existing high-voltage power lines – ranged from $441,000 per acre to $711,000 per acre in 2020.
“The data center industry is one of the industries that has grown tremendously,” Leclerc said.
The county’s overall commercial real estate assessments plunged nearly 5% in 2020, largely driven by losses in the retail and hotel industry due to the COVID-19 pandemic. But the rapid growth in the data center market has gone in the opposite direction -- also spurred by the pandemic -- and the shift to remote work.
“I've heard estimates that it would be 10 years before we were at this level of people working from home and needing this much access and bandwidth. That 10 years got compressed into the pandemic year,” Leclerc said.
Christina Winn, executive director of Prince William County Department of Economic Development, said Prince William County has been experiencing a higher demand for data center land than in the previous few years.
“I think it's fair to say that a continued move towards cloud computing, in addition to a growth in remote work during the pandemic, has fueled a demand for the bandwidth our data centers help provide,” Winn said.
Northern Virginia is the largest data center market in the world. A 2021 report from United States Commercial Real Estate Services found that demand outstripped the supply of available data center capacity in Northern Virginia in 2020.
The report noted that 61% of all new data center construction in the U.S. in 2020 took place in Northern Virginia.
Data centers have quickly become a major source of local revenue for Prince William County in the last few years, generating $64 million in local tax revenues in 2020 – up from just $22 million in 2016.
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April 21, 2021 at 02:51AM
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Data center market drives local vacant land prices near $1 million per acre - Prince William Times
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