LOUDOUN COUNTY, VA–There is a trend in the industrial space to build multi-story warehouses especially in urban infill locations. The reason is simple: land costs in such areas are rising higher and higher while the need for industrial operations grows just as rapidly.

Now that same trend, for similar reasons, is finding its way to Loudoun County's data center industry, according to JLL. It writes that:

Only four two-storied data centers existed in Loudoun County through 2013, while there were 21 single-story data centers. Yet with land options shrinking, which is pushing up pricing, and demand still escalating, developers have begun to go vertical.

Of the multi-tenanted data centers built since 2014, only three have been single story, while 11 have been two stories; QTS is currently building the first three-story multi-tenanted data center in Loudoun County.

This type of development will likely be watched closely by other areas of the country. Northern Virginia is a prolific developer of data centers but the supply-demand equation is the same for all markets: As more are built, there is less land available, which sends land prices up. JLL writes:

In 2017 alone, Google acquired 148 acres in two separate purchases, Sentinel Data Centers purchased 65 acres from AOL and QTS purchased two parcels across 52 acres. In total, these purchases removed 265 acres from the market and helped push average land prices to above $400,000 per acre, roughly four times higher than county land values in 2010.

JLL expects to see the same trend of going up in peer markets such as Prince William County.