Richmond is suddenly America's hottest data center hub
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The Richmond region is becoming the fastest-growing data center market in the country.
Why it matters: Its rapid rise is already crashing into power constraints and pushback so strong that some developers have temporarily pulled their applications.
The big picture: Northern Virginia's "Data Center Alley" being close to capacity is driving developers south, according to a report this month from real estate services firm Avison Young.
- The result: The Richmond region has seen a more than sevenfold increase in inventory so far this year.
- And the changes are happening quickly.
- Avison Young's February and May reports on the data center market, for example, didn't include Richmond at all.
Caveat: The report includes Fredericksburg as part of the Richmond market, and none of the data centers are actually in the city because, well, there's no space.
- But major suburban development projects — like Henrico's Iron Mountain data center — are helping drive business interest in the city, says Jennifer Wakefield, president and CEO of the Greater Richmond Partnership.
By the numbers: This year, developers have opened enough new data centers in the Richmond market to consume 720 megawatts of power, per the report.
- That's enough to power more than 500,000 homes.
- Within six months, companies have already swooped in to lease about 90% of that capacity.
Yes, but: The report notes that the Richmond market is also running out of space, and local opposition is growing from officials and residents.
- In June, Henrico tightened restrictions for new data centers by requiring permits that call for more scrutiny and public input.
- That same month, Chesterfield's planning commission unanimously voted down Tract's data center proposal, leading the company to withdraw its application.
- Last month, Amazon Web Services scrapped its massive Louisa data center plan after residents fought back against it.
The bottom line: Richmond's skyrocketing growth shows how fast secondary markets can explode.
- But with more than 9,000 MW of projects on deck, per the report — far more than today's existing capacity — the question is how long the region can sustain it.
Go deeper: Richmond's data center boom could raise your power bill