The Nov. 3 sale of 97 acres of data center land east of Leesburg for $615 million set a value record in the county—the first transaction exceeding $6 million per acre.
JK Land Holdings spent $57 million to acquire the Twin Creeks assemblage along Cochran Mill Road four years ago. The property, sold Monday to an affiliate of SDC capital partners, has been approved for five, two-story data centers. Another section of the property was sold for $45 million to Dominion Energy earlier this year for construction of an electrical substation.
JK Land Holdings manager Chuck Kuhn declined to comment on the details of the transaction, but said the property was ideally suited for data center uses and would have positive impact on the county.
That benefit starts with an immediate influx of significant tax revenue, he noted.
“This transaction brought $4 million of transfer taxes alone into Loudoun County—right this week,” he said. “This one project alone will create between 150 and 200 full time jobs in the county. It’s going to create hundreds of construction jobs for years in the county. … When you think about the construction workers utilizing hotel rooms, restaurants, gas stations, stores, etc., it’s really going to be a financial shot in the arm to the to the county and the town.”
The transaction may bring a new challenge to county assessors. The assemblage was on the tax rolls at a value of $59.8 million—less than 10% of the market sale.
As Commissioner of the Revenue Bob Wertz begins reassessments for next year, he said his office will have to look at data center land overall in the county and, while one transaction won’t influence everything, they may need to adjust the base rate based on the trend of steep increases.
Kuhn noted the Twin Creeks project is located in an area long planned for heavy industrial uses—land sitting vacant for decades.
“It was not providing jobs. It was not bringing in taxes. It was next to a rock quarry. So, I can’t think of a better place in the county for data than this location,” he said.
The deal is just the latest record-setter for data center sales. And it is unlikely to be the last.
“It’s supply and demand. We’re getting into very, very limited supply in the Northern Virginia area. You’re seeing sizable transactions,” Kuhn said. “With the new zoning regulations, we’re getting to the end of data in Loudoun County as we know it, and it’s driving up values. And that’s unfortunate to see. I don’t think data is right everywhere, but areas away from residential, away from schools, away from parks, certainly areas zoned for heavy industrial and quarry operations can be perfect locations.”
Chuck Kuhn
It won’t be the last data center deal for Kuhn either. Over the last 14 years, JK Land Holdings has become a major player in the market.
That started with challenges Kuhn faced in growing his moving company, JK Moving Services.
Kuhn said JK was a small business when it moved from Fairfax to Loudoun County three decades ago. With its growth, came the need to build additional warehouses. Increasingly, he said the firm was competing with data center developer for the same lots.
It started with a tract near the Rt. 28/Rt. 606 interchange.
“It was zoned for warehousing and data and we bought it with the with the with the plan to build storage buildings and continue to grow the moving business,” Kuhn recalled during an interview earlier this year. Soon he started getting calls from data center operators asking if they could buy it.
“I told the first three or four of them, ‘no, thank you. We’re moving forward with our warehouse plan,’” he said. “Then we started getting some unsolicited offers. And then finally, we got a group that was developing for Amazon that came in with an offer we couldn’t refuse, and so we sold it.”
The moving company then bought another warehouse tract along Rt. 606. And the data center calls started coming.
“That happened again and happened again—about four times over. Then finally, I said, wait a minute, maybe we need to pay more attention to the to the data center development here,” Kuhn said. They assembled a team of experts and created JK Land Holdings.
The company focuses on development of warehouse, flex and data center space, but it also is Loudoun’s most active player in farmland conservation, placing more than 22,000 acres under easements.
Although the target of growing community objections, Kuhn sees benefits coming from data centers for generations ahead.
“I do not think the answer is to put data centers everywhere. But I think, I think if we’re smart and we’re strategic, there’s smart areas to put it,” he said.
He said the industry has been a stabilizing force.
“As long as I’ve been involved in Loudoun County, it’s been boom, bust, boom bust, boom, bust, and a lot of it’s been focused around residential development,” Kuhn said. “What’s happened with the data center tax revenue is that it’s taken all of that out—it has created an annuity for this county that will go on for who knows how long.”
“Most of the leases we’re signing with the data center, hyperscalers, the Googles, the Amazons, they’re 25-year leases with 20-year renewals, and they’re being signed by blue chip companies, so they have to have every intention of being here for the foreseeable future—certainly in the next 45 years.”
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