By Amy Joyce Washington Post Staff Writer
Thursday, May 27, 2004; Page PW08
In 2000, at the pinnacle of the technology boom in the Washington area, large, impenetrable data centers were the hottest thing going in Northern Virginia commercial real estate.
But today, many of those buildings are decorated with "for lease" signs in front, begging clients to inhabit the windowless fortresses that were built to house the large servers that perform high-speed Internet and telecommunications functions.
With the rise of Internet use, developers thought the demand for secure, specially engineered buildings would skyrocket. During the boom, technology firms were asking for buildings with special specifications: concrete roofs, strong floors, super cooling systems, indestructible windows or no windows at all.
In the fall of 2000, a San Jose-based firm called US DataPort announced it would build an $800 million data-center campus at Virginia Gateway in Gainesville. The announcement was lauded by county officials, who were vigorously going after data-center development, believed to be the hot property of the day.
Today, US DataPort is nowhere near Prince William County. The company develops hotels and shopping centers, or, as company President Grant Sedgwick put it, more "conventional real estate."
"We stopped work on that [campus] about two years ago. There was a lack of demand for data-center space," he said. "We were in Northern Virginia purposely because data-center space was strong [there]. We had a great plan but should have brought it forward a year or two earlier."
Officials in Loudoun County, home to America Online and former home to companies that no longer exist, such as PSINet, are starting to look at the buildings as concrete albatrosses.
"I think we all were questioning how deep the data-center market would be," said Robyn Bailey, manager of business infrastructure for Loudoun County's Department of Economic Development. "There were so many people building data centers."
Real estate experts now say that data-center developers overestimated the demand for the buildings.
"A lot of them are either still sitting out there vacant or they're looking at the possibility of how can we convert this to more of a flexible-type use," said Malcolm Schweiker, senior vice president at CB Richard Ellis.
