Starwood Pays $4M an Acre to Build Data Centers

Why It Matters

The deal underscores soaring demand for data‑center sites, delivering significant fiscal upside for local governments while accelerating the region’s position as a cloud‑infrastructure hub.

Key Takeaways

• Fairfax County sells 42‑acre parcel for $166.8 million.
• Starwood plans data center, no entitlements yet.
• Expected first‑year tax revenue exceeds $20 million.
• Sale funds modernize county police training facilities.
• Northern Virginia data‑center deals surpass $1 billion this year.

Pulse Analysis

Starwood Capital’s acquisition of a 42‑acre tract in Chantilly marks another sizable entry into Northern Virginia’s data‑center boom. The parcel, formerly part of a police training campus, commands a premium price of $166.8 million, reflecting the region’s strategic appeal: proximity to major fiber routes, abundant power capacity, and a business‑friendly regulatory environment. While Starwood has not disclosed detailed plans, the county’s expectation of a data‑center build signals confidence that the site will soon receive the necessary zoning and infrastructure upgrades.

The Chantilly sale is part of a broader pattern of record‑breaking land transactions fueling the data‑center surge. Recent deals include Merritt Properties’ $375 million sale to Cologix in Ashburn and JK Land Holdings’ $615 million trade with SDC Capital in Leesburg. Collectively, these deals have pushed Northern Virginia’s data‑center land values beyond $1 billion this year alone, driven by cloud providers expanding capacity for artificial‑intelligence workloads and low‑latency applications. Developers are willing to pay top dollar for parcels that can accommodate large‑scale power and cooling systems, as the region’s grid and tax incentives remain highly competitive.

For Fairfax County, the transaction offers a dual benefit: a substantial infusion of cash to revamp its aging police training facilities and a projected $20 million-plus in annual tax revenue once the data center becomes operational. This fiscal boost can support new academy buildings, K‑9 training zones, and modernized driver‑training tracks. However, the success of the project hinges on securing entitlements, ensuring reliable power supply, and navigating community concerns about traffic and environmental impact. If these hurdles are cleared, the county could see a lasting economic uplift, reinforcing Northern Virginia’s reputation as a premier data‑center corridor.