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Skybox, Prologis Plan New Data Center Campus in Austin

BY RICH MILLER - MARCH 9, 2022

An illustration of the Skybox, Powered by Prologis data center campus in the Austin market. (Image: Skybox Datacenters)

Austin has become one of the hot new destinations for startups and tech companies. It’s no surprise that it’s also gaining traction as a home for data centers.

Skybox Datacenters and Prologis are partnering on a new data center in Pflugerville, a northern suburb of Austin. The Skybox Austin I project is the latest collaboration between data center developer Skybox and Prologis, one of the world’s largest logistics companies. The partnership – Skybox, Powered by Prologis – launched with a data center in Suburban Chicago and will continue with another in Pflugerville.

“It’s no secret that Austin has become a huge draw for some of the nation’s largest technology firms,” said Rob Morris, the CEO of Skybox Datacenters. “The unprecedented volume of new businesses, their employees and investment in the region is creating a new epicenter for technology and innovation.”

Oracle, Tesla and Digital Realty are among the companies that have relocated their corporate headquarters from the San Francisco Bay Area to Austin over the past several years, burnishing the region’s reputation as the “Silicon Hills” due to its strong concentration of semiconductor and computer companies, led by Dell Technologies and AMD.

The partnership between Prologis and Skybox highlights the growing intersection of logistics and digital infrastructure, which are both more important than ever in supporting global business through the COVID-19 pandemic.

An Experienced Player in Texas

Skybox Datacenters is based in Dallas and focuses on purpose-built facilities for the wholesale data center market, working with enterprise, hyperscale and colocation customers. Skybox Austin I will be a 30-megawatt (MW), 141,240 square-foot facility, and marks Skybox’s entrance into the Austin market. Skybox knows the Texas data center market well, having launched in Houston and then expanded to Dallas.

“We’ve always been intrigued by Austin,” said Morris. “Austin has been an underserved market, and we saw capacity in Austin dry up about 12 months ago.”

While not as large as Dallas or Houston, Austin has been an active location for data center capacity, with a strong local provider in Austin-based Data Foundry as well as facilities from larger platforms like Digital Realty, CyrusOne, Flexential and Element Critical.

Switch made a major push into the Austin market in 2021, as it acquired Data Foundry and then announced plans for a 1.5 million square foot data center campus adjacent to the Dell Technologies global headquarters in Round Rock. More new players are likely to follow.

Morris believes the location in Pflugerville, just south of the Dell headquarters campus in Round Rock, will allow Skybox to bring capacity to market quickly and efficiently. The site is supported by two substations and is supplied by ONCOR, which offers more competitive rates than Austin Energy.

In other markets, Skybox has offered powered shell facilities and build-to-suit projects as well as large-footprint wholesale data centers. The Austin property will feature turnkey data halls sized at 2 to 4 megawatts of capacity.

“It’s the next evolution of our turnkey product,” said Morris. “Austin represents a future for us that’s built for hyperscale more than the general enterprise.”

The company has lined up incentives from Pflugerville Community Development Corporation that offer up to $1.5 million over 10 years to support job creation by tenants at the new data center.

The incentives will be paid once Skybox proves investment thresholds have been met, and passed through to tenants via rent credits or tenant improvement allowances. The Pflugerville city council approved the incentive package in a meeting Tuesday night.

The Prologis Partnership

As it enters new markets, Skybox has lined up a powerful partner in Prologis, a global leader in logistics real estate, with 984 million square feet of facilities and development projects in 19 countries.

Logistics specialists like Prologis have extensive real estate holdings in proximity to population centers, which are also key data center destinations as cloud platforms and video services seek to bring content closer to eyeballs. With access to hundreds of real estate assets, Skybox and Prologis can offer users the combination of scale and a roadmap for future growth.

The first Skybox, Powered by Prologis project is a 30-megawatt, 189,000 square foot data center that recently opened in Elk Grove Village the leading data center hub in the Suburban Chicago market.

“It has been a tremendous partnership,” said Morris. “Prologis has enabled so many great opportunities.”

That includes the supply chain, where Prologis has lead time on material procurement, a key factor during supply chain strains. The Prologis real estate portfolio also allows Skybox to serve the growing market for edge capacity for hyperscale operators. who are keen to offer low-latency data delivery to support distributed apps, including a future metaverse.

“The definition of edge has absolutely changed,” said Morris. “Three years ago, that edge requirement was 100 to 200 kilowatts. Now you don’t see much less than two megawatt lineups for these deployments. Edge nodes are no longer small things.”