Starwood Buys Data Center Site in Virginia for $167M

Barry Sternlicht is taking more ownership of one of the country’s data center meccas: Northern Virginia.

An affiliate of Sternlicht’s Starwood Capital Group purchased roughly 42 acres from Fairfax County in Chantilly for $166.8 million, the Washington Business Journal reported. The land is sliced off from a law enforcement training campus, which was being underutilized; the county will use the money to upgrade other police training facilities.

The acquisition works out to roughly $4 million an acre. Proponents of the sale celebrated the return for the county on the aging infrastructure, but opponents blasted the disposition of a long-term community property.

The deal for 3721 Stonecroft Boulevard came from an unsolicited offer, according to the county. That was followed by third-party appraisals — which Starwood supposedly surpassed — before county selection. There will be a contingency period on the deal that will last for a year.

The county expects to generate $20 million in tax revenue from a data center development. First, however, such a development would need to be approved. That’s no sure thing as opposition to data centers rises across the country. Starwood still needs land use approvals to construct a data center.

Starwood is not a stranger to the region, as it already has a data center campus under development in nearby Herndon. Starwood purchased the site for its Renaissance Technology Park on eight acres from Word of Grace Christian Church in 2023 for $25 million, the Commercial Observer reported.

Starwood recently appointed John Gonnella of Centerbridge Partners as senior managing director and head of U.S. asset management. Among the tangled web of subsidiaries within Starwood is data center investment platform Starwood Digital Ventures.

Incidentally, the Chantilly land is not far from Dulles Discovery 2. Last year, the CIA discreetly purchased the 434,000-square-foot office building for $246.6 million from Peterson Companies. The purchase of the building, part of the larger Dulles Discovery campus where the CIA is already the largest leaseholder, broke down to $568 per square foot.

— Holden Walter-Warner