350 East Cermak, the 1.1. million square foot carrier hotel owned by Digital Realty, is a key connectivity hub in Downtown Chicago. (Photo: Rich Miller)
The two-pronged expansion strategy reinforces the importance of Chicago as a growth market for cloud computing and financial services.
Leasing was strong during 2015, with net absorption of 27 MW of capacity. This robust leasing has prompted new construction, with up to 200 MW of additional capacity planned for coming years.
It also mirrors efforts by data center providers to lock down future capacity to support the growth of cloud computing and other emerging technologies. Similar activity is being seen in two other leading Noth American data center markets, in Northern Virginia and Silicon Valley.
“Data center demand is surging, driven by the rapid growth of cloud adoption and corporate IT outsourcing,” said Todd Bateman, North American Agency Practice Leader for CBRE’s Data Center Solutions Group.
“Demand is outpacing supply, both at the national level and within the Chicago area in particular. The state-of-the-art proposed design at 330 East Cermak, along with the proximity to Lakeside Technology Center at 350 East Cermak, would address market demand and provide prospective customers with the expansion capacity and network density to meet their colocation and interconnection needs.”
The 330 East Cermak site is next door to the 1.1-million-square-foot data center at 350 East Cermak, which is the premier interconnection, colocation and telecommunications hub in the Midwest and the nucleus of Chicago’s commodity markets and financial firms.
The greater Chicago market is home to more than 1.85 million square feet (SF) of commissioned data center space, representing 210 megawatts (MW) of commissioned power, according to DatacenterHawk, a Dallas-based research firm that tracks the availability of data center space. Demand for space is strong, as reflected in the vacancy rate of just 8.5 percent for the region.
New Inventory Alters Market Dynamics
Downtown Chicago has primarily been a retail colocation market, offering connectivity and interconnection services but few large physical footprints. Space at 350 Cermak and other downtown hubs has been in short supply in recent years, with limited new inventory coming online.
