Prologis (NYSE: PLD), a global logistics real estate company, disclosed through Loudoun County’s Planning Commission that it is seeking to develop a new ~500k sqft data center on a 19.5-acre (850k sqft) industrial site that it currently owns in Sterling, Virginia, through its entity DCT Dulles Phase I LLC and via a project named Prologis NOVA 1. Based on additional filings in Loudoun County (see below), Prologis appears to be developing this facility alongside Skybox Datacenters, an owner, operator, and developer of hyperscale data centers.

Prologis NOVA 1 – Overview

Prologis NOVA 1 is located at 22675 Dulles Summit Court, Sterling, Virginia. The property is situated north of Old Ox Road (Route 606) and west of Sully Road (Route 28) with site access off of Dulles Summit Court (Route 1029).

Prologis NOVA 1 Site Map

Presently, Prologis’ property spans four 1-story buildings, which together comprise 287.3k sqft, and are operating under industrial use.

Zoning Change

Prologis is seeking to rezone 19.51 acres (850k sqft) from the Planned Development – General Industrial (PD-GI) zoning district, to be governed by a more recent Zoning Ordinance. Additionally, the company is requesting a Special Exception (SPEX) to increase the maximum Floor Area Ratio (FAR) for data center use from 0.40 to 0.60. Finally, Prologis is pursuing a Zoning Modification (ZMOD) to reduce the building setback from 100 feet to 35 feet.

Ultimately, Prologis is proposing to develop a data center at this site, which is a core use within the property’s designation as a Suburban Industrial Place Type.

Development

Prologis and Skybox intend to replace the existing buildings at the site with a new two-story data center, which spans ~500k sqft (referenced as both 496.6k sqft and 509.8k sqft). Additionally, the companies do not anticipate a need for a substation on-site.

Situation Overview – Skybox Datacenters and Prologis

As part of the Pre-Application Conference for the Prologis NOVA 1 project, Skybox Datacenters took part in the applicant discussion, with the company’s CEO, Rob Morris, being named in attendance. Notably, Skybox Datacenters has an existing joint venture with Prologis to develop data centers for hyperscale, colocation, and enterprise customers. Presently, Prologis and Skybox are developing a 30-megawatt data center in Elk Grove Village, Illinois, which is located 20 miles northwest of Chicago.

Northern Virginia

Per Skybox Datacenters’ website, the company notes that it is in the process of delivering Skybox NOVA, a 10-acre campus located in the Dulles Technology Corridor (i.e., in close proximity to Washington Dulles International Airport). Indeed, the Prologis NOVA 1 site at 22675 Dulles Summit Court borders Dulles Airport.

By November 2022, Skybox anticipates delivering 30 megawatts of power capacity across 210.5k sqft through its Skybox NOVA project.

Sponsors

Skybox Datacenters has backing from Dallas, Texas-based Rugen Street Capital and Bandera Ventures.

History – Prologis and DCT Industrial Trust – Logistics Meets Data Centers

Ownership of the industrial / data center development site in Sterling, Virginia came as part of Prologis’ $8.5bn acquisition of DCT Industrial Trust in August 2018. Notably, Amazon was DCT Industrial Trust’s largest tenant – and DCT’s CEO Phil Hawkins previously stated that his company’s “growth in Amazon” leasing contribution was “half of it roughly in NOI, not square footage, is AWS and half is fulfillment”.

Thematically, this shows that logistics companies like Prologis and DCT have been leveraging their relationships with customers like Amazon, to go beyond providing these tenants with solely logistics space. In addition, Prologis and DCT have offered powered shell data centers to separate divisions of their key customers, such as Amazon Web Services (AWS).

To this end, the Prologis NOVA 1 property is adjacent to a data center use building to the northeast and another data center use building, to the east, across the street. Below are further details on these data centers:

  • Northeast: two buildings owned by Prologis, with the tenant being Amazon Web Services (AWS). Specifically, AWS operates the facilities as its IAD15 and IAD16 data centers
  • East: owned by First Industrial Realty Trust (NYSE: FR), with the tenant being Amazon Web Services (AWS). Specifically, AWS operates the facility as its IAD12 data center
Mary Zhang covers Data Centers for Dgtl Infra, including Equinix (NASDAQ: EQIX), Digital Realty (NYSE: DLR), CyrusOne, CoreSite Realty, QTS Realty, Switch Inc, Iron Mountain (NYSE: IRM), Cyxtera (NASDAQ: CYXT), and many more. Within Data Centers, Mary focuses on the sub-sectors of hyperscale, enterprise / colocation, cloud service providers, and edge computing.

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