Cloud Capital, an affiliate company of CloudHQ, which is a hyperscale data center developer and operator in the United States and Europe, has acquired via an investment vehicle, 100% of a 19.25-megawatt wholesale data center in Manassas, Virginia, known as COPT DC-6, from Corporate Office Properties Trust (NYSE: OFC) for $222.5m.
COPT DC-6 – CloudHQ Acquires Wholesale Data Center
COPT DC-6 is a two-story wholesale data center located at 9651 Hornbaker Road in Manassas, Virginia, which is part of Prince William County. The facility is situated on a 19.5-acre land parcel in the 1.5k-acre Innovation Park.
Overall, COPT DC-6 comprises 19.25 megawatts of power capacity across 233k sqft of gross building area, of which 100k sqft is raised floor.
Utilization
As of September 30, 2021, COPT DC-6 was 86.7% leased, implying that 16.7 megawatts of the data center’s capacity was utilized. However, as shown below, an 11.25-megawatt lease that expired in August 2020 remains in-place until renewed by both parties or terminated by either party.
Lease Expiration Profile
| Year of Expiration | MW | Rental Revenue Expiring |
| 2021 | 11.25 | $14.9m |
| 2022 | 1.15 | $2.5m |
| 2023 | 1.19 | $2.3m |
| 2024 | — | — |
| 2025 | 3.10 | $5.3m |
| Thereafter | — | $0.3m |
| Total | 16.69 | $25.3m |
Per the latest investor presentation of Corporate Office Properties Trust (COPT), the company categorizes this 11.25-megawatt anchor tenant lease in its “risks” category.
Financials
During Q3 2021, COPT DC-6 generated revenues of $8.6m, net operating income (NOI) of $3.3m, and Cash NOI of $3.4m. Therefore, on an annualized basis, COPT DC-6 produces revenues of $34.5m, net operating income (NOI) of $13.2m, and Cash NOI of $13.5m.
Real Estate
As of December 31, 2020, Corporate Office Properties Trust (COPT) held the 9651 Hornbaker Road data center at a gross carrying value of $272.5m. Incorporating accumulated depreciation of $72.2m, the property’s net carrying value equates to $200.3m.
Prior Sale
In September 2010, Corporate Office Properties Trust (COPT) acquired the 9651 Hornbaker Road data center, which was known as Power Loft @ Innovation, for $115.5m. At this time, COPT committed to complete the remaining development of the site, with additional development costs of $166m.
Ownership Structure
The wholesale data center located at 9651 Hornbaker Road in Manassas, Virginia is owned through the entity COPT DC-6, LLC (previously Powerloft @ Innovation I, LLC), via the holding company, Powerloft Holdings, LLC.
Transaction Rationale – Corporate Office Properties Trust (COPT)
Corporate Office Properties Trust (COPT) intends to recycle proceeds from the sale of COPT DC-6, to Cloud Capital, into funding its 1.8 million sqft of development projects that, on September 30, 2021, were 94% leased. Additionally, this sale simplifies COPT’s corporate profile by divesting the only multi-tenant data center from its portfolio.
