CenterPoint Plans 12-Story Data Center Next to Chicago Data Hub

Chicago officials have approved plans for CenterPoint Properties Trust to build a 12-story data center next door to the city's primary Internet data hub at 350 East Cermak. The project will provide much needed expansion space for companies seeking access to the hundreds of networks doing business at 350 East Cermak, which is owned by Digital Realty Trust.

On April 24 the Chicago Plan Commission approved a redevelopment plan to create an entertainment and business district near McCormick Place, the convention center on the Chicago lakefront. The project, spearheaded by the Metropolitan Pier and Exposition Authority, includes a new basketball arena for DePaul University, a 1,200-room Marriott hotel, retail space and the new server farm. The plans for the data center call for office space and below-grade parking, in addition to mission-critical space.

The Chicago Tribune reported that some neighbors expressed concern during community meetings about noise from generators at the proposed data center. Developers say the presence of the Marriott next door will provide an incentive for proper sound management, and CenterPoint said it plans to install sound-absorbing barriers.

Limited Space in Downtown Chicago

Downtown Chicago has a limited supply of finished data center space, creating a challenge for companies seeking a large footprint.

"The Chicago area is one of the tightest data center markets in the country," commercial real estate brokers from Avison Young write in a recent update. "There is less than 2 MW of wholesale space in downtown Chicago, commanding some of the highest pricing in the U.S. It may be one of the only markets in the country where rental rates will increase during 2014."

A number of developers are pursuing new data center projects in downtown Chicago, including Ascent Corp. and perhaps QTS Realty. Existing providers include Digital Capital (725 S. Wells) and Server Farm Realty.

Space in the Suburbs

While space remains limited downtown, there's more capacity coming online in the western suburbs, where a cluster of data centers have sprung up to meet demand for space near Chicago. Avison Young says Digital Realty has leased the entire first phase of its Digital Chicago project in Franklin Park. Digital Realty has reportedly signed leases with multiple tenants, including a 1.5 megawatt deal with SingleHop hosting.

The three-building, 22-acre data center Digital Chicago campus will have the capacity to accommodate up to twenty 1.125 MW Turn-Key Flex data center PODs, or 32.6 MW of IT load.

Other companies with new projects or expansions in suburban Chicago include DuPont Fabros Technology, Forsythe Technology, Latisys, ByteGrid, Server Farm Realty and Continuum.

CORRECTION: An earlier version of this story reported that Equinix had made a commitment to be a tenant in the CenterPoint project. Equinix says it has not signed a lease.