Sabey Data Centers Picks Oregon for $950M Project – What is a Ground Lease?

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Sabey’s Umatilla, Ore., data center will comprise 700,000 square feet across two buildings. Rendering courtesy of Sabey Data Centers

Sabey Data Centers has acquired a 60-acre lot in Umatilla, Ore., where it plans to build a 100-megawatt data center campus. The development is estimated to cost around $950 million, while the Columbia River-adjacent land was acquired for $3 million, Sabey Director of Marketing Teddy Otero told Commercial Property Executive. Construction is set to begin next year.

Sabey’s first facility in the state will encompass two buildings totaling 700,000 square feet upon full build-out. Clients will be able to access modular build-to-suit options, for both enterprise and hyperscale deployments.

Additionally, the developer will focus on sustainability features. Sabey plans to acquire and invest in carbon-free energy with the explicit purpose of meeting net-zero by 2029 across its national portfolio. Plans include a target of 1.15 power usage effectiveness and relying less on water-based cooling for its upcoming development.

A complementary market

Otero told CPE that the advantages of building in Umatilla County are akin to those of the neighboring state of Washington, where Sabey currently operates data centers in three separate locations: mild climate, available land, stable tectonics, access to renewable hydropower, business-friendly climate and a growing tech workforce.

“Cloud providers and large tech companies have started to establish a new data center zone in north-central Oregon, as a complementary market to the nearby Hillsboro hub,” Otero added.

Amazon spearheads this new data center area—earlier this year the e-commerce giant secured $1 billion in tax incentives to build five new facilities in Port of Morrow, roughly 20 miles west from Sabey’s upcoming campus. Morrow County officials hope this will result in investments of $12 billion for the region, OregonLive reported.

Oregon’s growing data center industry

Crane’s upcoming 50-megawatt facility in Forest Grove, Ore., will include an option to expand to more than 100 megawatts. Image courtesy of Crane Data Centers

Nearby Hillsboro is one of the fastest-growing data center markets in the U.S. According to a CBRE report, the market’s 248-megawatt inventory is bound to more than double in capacity, according to pipeline figures. As of June, the market had an additional 267 megawatts under construction and a vacancy of 3.3 percent.

Recent developments include Flexential’s expansion and new entrant Crane Data Centers’ 100-megawatt campus.

According to Otero, the rise of AI is also playing a big role in new development. “The advent of AI isn’t being compared with the rise of cloud computing but with the advent of the internet itself. Despite this tremendous demand, inflation and supply chain challenges have materially impacted the pricing of infrastructure and IT equipment,” he added.

This growth has pushed developers and operators to expand further up along the Columbia River—in regions such as Morrow and Umatilla counties—incentivized by lower power costs, land and power availability.

The post Sabey Data Centers Picks Oregon for $950M Project appeared first on Commercial Property Executive.

 This is the company’s first facility in the state.
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In the simplest form, a ground lease is a long-term net lease (usually 49 years or 99 years) of land including any improvements on the said land. Assets that can be subject to a ground lease include but are not limited to, vacant land, office buildings, and large residential buildings.

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