REAL ESTATE NEWS

American Real Estate Partners (AREP) has raised $309 million from its Strategic Opportunity Fund IV, which will target both residential projects and data centers.

The Virginia-based firm said that 80 percent of the fund will be utilized to expand its data center platform PowerHouse, which offers cloud service providers real estate solutions in the northern region of the state. Also, for data centers, the investments will target infrastructure in the sector.

Along with PowerHouse, which the company debuted in 2022, AREP's expansion into the data center space dates back to 2016, when it purchased nearly 1.8 million square foot Quantum Park, in Ashburn, Virginia.

Now, AREP said it is prioritizing "investment opportunities long before they become mainstream." The company plans to use that same logic to as well target residential properties, which it also refers to an asset class that is in "high demand."

“This $309 million raise signals both tremendous growth and a bold shift in AREP’s capacity to scale and lead. The pivot into data centers and digital infrastructure is the result of our team’s deliberate, long-term strategy to invest in sectors that drive tomorrow’s economy," AREP president and co-founder Brian Katz, said in a statement.

"Our approach didn’t just follow industry trends—it helped reshape them. As a top five data center developer and rising industry force, we’ve built a platform for sustainable growth that stays ahead of market demand. From data centers powering the digital landscape to modern, high-demand residential communities, we’ve consistently anticipated where the market is headed. We expect Fund IV to build on this momentum, enabling us to pursue even larger, transformational assets for our investors.”

The intentions of AREP come after Blackstone's energy investment unit announced it agreed to acquire a 74-megawatt natural gas-fired power plant located in Loudoun County. Reuters reported the deal to be worth roughly $1 billion. While AREP did not specify that its fund would focus only exclusively on northern Virginia for data center investments, the region appears to have at least some demand or upside that firms are betting on.

According to AREP, it has more than $13 billion in gross assets located in the U.S.

Source: GlobeSt/ALM