The Northern Virginia Data Center Market: History, Power Limits and Land Prices

Northern Virginia’s lead began with networks, not buildings. MAE East, one of the early internet exchange points, operated near Loudoun County, and America Online opened its global headquarters in Ashburn in 1996.² The first data center in Ashburn is believed to be the former Dulles Technology Center, a bunker-like building AOL created in 1997 to serve its dial-up customers.¹⁰ Loudoun County credits proximity to the federal government, Dulles Airport, the exchange and a skilled workforce.²

The next step was carrier-neutral colocation. Equinix opened its first data center, DC1, in Ashburn in the late 1990s, and its Ashburn campus became the area’s leading internet exchange.¹⁰ By around 2009, MAE East had shut down as network operators moved toward scalable, carrier-neutral facilities, which is the model that still anchors the market.² Once networks and carrier hotels concentrated there, new tenants had reason to locate nearby, and hyperscale campuses followed. Our guide to internet exchange points and carrier hotels explains that mechanism in general terms.

Brokerage counts measure the market in megawatts of commissioned capacity. CBRE reported that Northern Virginia ended 2025 with 4,039.6 MW of inventory, 37% more than a year earlier, after 1,102 MW of net absorption in 2025, a 144% increase over 2024.¹¹ By the first half of 2026 inventory had reached about 4,496.5 MW, net absorption for the half was 467.6 MW, the highest of any primary North American market, and vacancy had fallen to 0.2% from 0.7% a year earlier.¹

Vacancy in these reports measures leasable power capacity, so 0.2% means that almost nothing is available to lease today. CBRE also reported that more than 80% of capacity under construction across primary markets was already preleased, and that average asking rents rose for every deployment size in the first half of 2026, led by an 8.3% increase for users of 3–10 MW.¹ For how these metrics are defined and compared, see data center vacancy, absorption and pricing.

Loudoun County’s own count is in buildings and floor area. As of March 1, 2026, it reported about 233 data center buildings totaling roughly 56.5 million square feet built or under construction, more than 10 million square feet permitted in 2025 alone, and about 35.7 million square feet approved but not yet built.² At the state level, the General Assembly’s JLARC study found in 2024 that Virginia’s roughly 340 data center buildings needed about 5 GW of generating capacity, and that this demand was expected to double over 15 years.¹²

For most of the market’s history, power was a strength. Dominion Energy said in August 2022 that it had connected close to 70 data centers with more than 2.6 GW of capacity in Northern Virginia since 2019.⁷ That pace outran the transmission lines feeding the core of the market. In July 2022 Dominion began telling data center companies that power for some new facilities in eastern Loudoun would be delayed for years, because its transmission system had not kept pace with growth.³

Dominion resumed some connections that September on an incremental basis, after accelerating near-term work such as series reactors on an existing 230 kV line and reconductoring three others. Coverage at the time said the available power was far less than providers had expected, that constraints in parts of the alley were likely to last until new transmission was completed around 2026, and that some projects could wait as much as four years.³ Dominion’s CEO said the longer-term solution required more transmission, including two new 500 kV lines into eastern Loudoun.⁷ Confirm the current status of any specific line with Dominion before relying on it.

Concentration also creates reliability questions. On July 10, 2024, a lightning arrestor failure on a 230 kV line led to a customer-initiated loss of about 1,500 MW of voltage-sensitive data center load in Dominion’s zone.¹³ Frequency and voltage stayed within safe limits, but operators had to bring voltage back to normal levels, and PJM’s operating committee chair said the facilities were disconnecting too early for a fault that cleared normally.¹³ Events like this are why utilities now ask about ride-through behavior during interconnection; see NERC reliability and large loads.

Demand for new service is now many times the size of the existing market. On its July 31, 2026 earnings call, Dominion reported more than 53 GW of data center capacity in various stages of contracting, including about 12 GW under electric service agreements, and more than 5 GW of new contracts since the end of 2025.⁸ Not all of it will be built, but even the contracted portion, which covers Dominion’s whole territory, is more than twice Northern Virginia’s current inventory.¹

Regulators have responded by shifting more risk to large customers. In its November 25, 2025 final order in Dominion’s biennial review, the State Corporation Commission created a GS-5 rate class for customers with demand of 25 MW or more, effective January 1, 2027.¹⁴ Customers in the class must pay at least 85% of contracted transmission and distribution demand and 60% of contracted generation demand, whether or not they use it, so that other ratepayers do not carry infrastructure built for data centers.¹⁴ Who ultimately pays for grid expansion is covered in data centers and electricity ratepayers.

Regional transmission planning is also catching up. PJM approved about $5.9 billion of new transmission projects in 2025, describing them as needed for reliability and to serve large loads, with data centers among the drivers of forecast growth.¹⁵ JLARC similarly concluded that meeting Virginia’s projected demand would require significant high-voltage transmission improvements in addition to new generation.¹² See PJM site selection for the regional process.

Power scarcity and zoning limits have made entitled, powered land in Northern Virginia some of the most expensive industrial land in the country. A 2026 National Association of Home Builders analysis compiled several recent sales: SDC Capital Partners paid $615 million for a 97-acre Loudoun parcel in November 2025, about $6.3 million per acre; Microsoft paid $465.5 million for about 124 acres in Prince William County in 2024, about $3.75 million per acre; and Amazon’s 2025 purchase of about 189 acres in the same county for $700 million priced at a similar level.⁵

The same analysis lists other data points that follow the pattern. Starwood Capital agreed in 2026 to buy about 42 acres of county-owned land in Chantilly, in Fairfax County, for $166.8 million, about $4 million per acre, and in March 2026 a developer reportedly offered homeowners in Ashburn’s Regency neighborhood about $4.4 million per acre to assemble a site of roughly 130 acres. For comparison, it cites 2025 median land prices of about $125,000 per acre in Loudoun and $93,750 in Prince William.⁵

These are whole-parcel prices for large sites, often with zoning or utility commitments in place, compiled by a home builders’ group arguing that data centers outbid housing.⁵ Unentitled farmland several counties out does not trade at these levels. The premium is paid for certainty of power and approvals, which is the subject of what drives data center land value.

The county rules that let the market grow quickly have been rewritten. On March 18, 2025, Loudoun’s Board of Supervisors voted 7–2 to make data centers a special exception use in districts where they had been allowed by-right, which means public hearings before the Planning Commission and the Board instead of administrative site plan approval.⁴ Applications under review as of February 12, 2025 could continue under the old rules only if the proposed data center was more than 500 feet from residential areas.⁴

Prince William County, which many expected to absorb Loudoun’s overflow, has seen its largest projects meet resident opposition and litigation.¹⁶ The PW Digital Gateway, a rezoning for a large data center corridor, was halted again in a unanimous March 31, 2026 Virginia Court of Appeals ruling, after a lower court had voided the rezonings for failing to meet public notice requirements.⁹ Fauquier County adopted a data center moratorium in 2024 that was later partially lifted.¹⁶

The fiscal stakes help explain why counties still want the industry on their own terms. Loudoun reports that data centers occupy about 4% of its commercial parcels but yield about 38% of general fund revenue, adding more than $100 million of new revenue a year, though the county expects growth in data center personal property tax to plateau within five to ten years.⁶ County-by-county ordinance changes are compared in data center zoning ordinances and overlay districts.

With the core of Data Center Alley short of power and land, development has pushed outward along transmission corridors. Culpeper County is the clearest example: AWS secured approval for a two-building, 430,000-square-foot campus there in 2022, and CloudHQ, DataBank, EdgeCore and others followed; the county’s technology zone concentrates data center development in a designated area, which local observers credit with limiting conflict over sprawl.¹⁶

Outer counties offer cheaper land and sometimes earlier transmission access, but with thinner fiber, less experienced permitting staff and wary electorates. Growth beyond Northern Virginia, including the Richmond area and southern Virginia, is covered in data center site selection in Virginia, and comparable national markets are in major U.S. data center markets.

1. 01Ask Dominion (or the relevant cooperative) what capacity is available at the nearest substation, which transmission projects it depends on and their current schedules.
2. 02Model the cost of the GS-5 minimum demand charges from 2027 for a load of 25 MW or more, not only the energy rate.¹⁴
3. 03Confirm the zoning path: in Loudoun, data centers now need a special exception with public hearings in districts where they were once by-right.⁴
4. 04Check residential distance and grandfathering status, and read recent county board actions before assuming prior approvals still apply.
5. 05Benchmark price against entitled, powered comparables, and discount for missing power or approvals.
6. 06Map fiber routes and distance to the Ashburn exchange ecosystem if latency matters to the likely tenant.

BlackForge screens parcels against these factors before a landowner or buyer commits to a price; you can get a site reviewed or see our methodology.