Data Center Developer Flexential Begins Major U.S. Expansion With New Atlanta Project

Data center developer Flexential is planning to dramatically expand its data center footprint with new construction in the coming years, and it is kicking off the push with a big project in the Atlanta market. 

The Charlotte-based colocation provider began construction on a 150K SF, 22.5-megawatt data center in Douglasville, Georgia, and Flexential executives tell Bisnow it is the first step of an aggressive national growth strategy. 

The company plans to build around 93 MW of data center capacity by the end of next year, more than four times the 19 MW it built between 2019 and 2021. 

“We’re going to deploy 33 MW this year. Next year we’re targeting 60, and it’s going to be at that higher level moving forward,” Flexential Chief Operating Officer Ryan Mallory told Bisnow. “We’ve talked about some other markets — we have a strategic game board that we continue to focus on, and we will continue to expand in existing markets and new ones as well.”

The push comes after Flexential in December raised $2.1B through a securitization offering, a deal the company said was the largest asset-backed securities issuance in the history of the data center industry.  

According to Mallory, the new Douglasville facility will be fully built out and ready for deployments at its full capacity by the end of the year. Initial tenants will include software as a service firms already under contract with Flexential, although company officials predict demand will be driven by large public cloud providers that need so-called edge deployments in the range of 2 to 5 MW. 

Power will be provided by hyperlocal utility GreyStone Power Corp. Renewable energy will account for less than half the power supplied to the Douglasville site. But as Bisnow has reported previously, data centers have become a key driver of renewable energy development in Georgia, particularly through partnerships with hyperlocal utilities like GreyStone.  

With existing legacy data centers in the nearby communities of Alpharetta and Norcross, power cost and availability were the driving site selection factors pushing Flexential to Douglasville, Mallory said.

As is typical in data center development, Flexential’s site selection process also weighed fiber connectivity, tax incentives and land cost. Mallory said the company also paid close attention to economic growth trends within the Atlanta market to find sites close to emerging commercial hubs and potential customers who value both physical access to the data centers and the low latency created by proximity to their servers.   

“We start looking at marketwide GDP growth, and then, within the market, we look at it on a micro-level: Where are the people going, and where are businesses investing?” Mallory told Bisnow. “This site ticked all the boxes.” 

In addition to new development in Atlanta, Flexential just completed construction on a 36 MW facility in the West Coast data center hub of Hillsboro, Oregon, and significantly increased the capacity of its Denver-area data center. Mallory said it is planning more development in the 19 North American markets where Flexential already has a presence. 

“In all of our existing markets that are top 10 markets for growth, we have a focus on expansion,” Mallory said. “We’re watching them closely, and like in Atlanta, when we find the right type of property with the right type of partners, we move forward with it.” 

Flexential’s expansion in the coming months will likely also include development in new regions, particularly smaller second- and third-tier markets, Mallory said.

Although company officials declined to provide specific locations, Mallory said there are seven specific markets the company is “actively pursuing." He said these are regions where existing customers have asked for additional infrastructure or where potential tenants have been identified. The bulk of these tenants would be hyperscale cloud providers in need of smaller edge deployments.

Finding appropriate locations for new data center development in these smaller markets can be a challenge, Mallory said, as property owners, utilities, builders and other local partners are less familiar with the industry and the intricacies of data center site selection. But with demand surging and colocation providers looking to pull the trigger once the right site becomes available, Mallory said CRE professionals in emerging data center markets should be familiarizing themselves with the industry if they want to be able to take advantage of what is likely to be a wave of providers looking for places to build. 

“Make sure you're getting close to companies like Flexential that are operating in the Tier 2 or Tier 3 markets,” he said. “All of us are active right now looking for partners.”