Chicago Update

National Highlights

  • Data center construction activity increased by $8 billion from 2009 to 2010  according to International Data Corporation.
  • The streamlined construction processes and economies of scale enjoyed by large developers have resulted in a significant decrease in construction costs on newer projects.  Combined with steady rental rates,this trend has resulted in higher return for developers.
  • While existing wholesale tenants expanding their footprints have dominated leasing activity,  there is significant activity from large enterprise users looking for new requirements.

Spotlight:Metro Chicago

  • Downtown Chicago is one of the tightest wholesale markets in the country,whereas the suburban market is much softer due to new projects by  Corelink,Latisys,and Ascent and Phase II of DuPont and Equinix.
  • There is approximately 15 MW of wholesale demand in the Chicago land area.
  • The market is active with non trading exchange companies,including law firms,banks,universities,hospitals and many other locally based companies.
  • Red Sea Group acquired a 440,000-square-foot  former Northern Trust office building and will convert 120,000 square feet into data center space. Red Sea anticipates delivering 3.6 MW in September 2011.
  • Downtown  colocation  rack  pricing  is as high as $800/KW.
  • Wholesale rental rates are pushing $175/KW for downtown space.
  • There is only one wholesale POD available for immediate occupancy in downtown Chicago. It is 1.35 MW (8,200 square feet).
  • A new provider,Digital Capital Partners,is offering smaller wholesale suites downtown. Each floor delivers approximately 650 KW and can accommodate up to 150 cabinets.
  • DuPont Fabros has preleased 29 percent of Phase 2 data center in Elk Grove Village.
  • ServerCentral expanded by another 2.6 MW  in the DuPont Fabros property. The initial deployment was 1.3 MW in the fourth quarter of 2009,and the company now leases a total of 5.2 MW.
  • The Chicago Mercantile Exchange has had a steady flow of leasing activity in its suburban  Aurora facility,which will open  for colocation customers in  2012.

Major Recent Deals

  • ServerCentral – 2.6 MW
  • Comcast – 1.8 MW

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