• Commercial Real Estate
  • Microsoft plants seeds for data center at former suburban farm

    The company paid $52.3 million for 37 acres in the Elk Grove Technology Park, while T5 Data Centers acquired a new building there for $29 million.

    T5 Data Centers paid $29 million for this new 164,000-square-foot building in the Elk Grove Technology Park.

    79彩票注册网址

    Some big data centers could soon sprout from a former 86-acre farm in Elk Grove Village recently transformed into an industrial park.
     
    Microsoft paid $52.3 million for 37 acres within the in the northwest suburb, while T5 Data Centers has acquired a new 164,000-square-foot building in the park for $29 million, according to real estate filings with the state. The two deals mark a big step forward for Rosemont-based Brennan Investment Group in its $1 billion push to redevelop the former Busse Farm into a destination for industrial and high-tech companies.
     
    The deals may also be an early sign that state tax breaks for data centers approved last year are having their desired effect. The measure, part of a $45 billion state capital bill, provides a sales-tax exemption and income-tax credits for companies that invest at least $250 million in new data centers in Illinois.
     
    The incentives “make Illinois one of the low-cost markets to site and lease a data center,” said Todd Bateman, a CBRE executive who handles leasing for Brennan at the Elk Grove development. “We have seen an accelerated interest in putting down data centers in Illinois.”
     
    Data centers are a growing real estate sector, fueled by the rise of cloud computing and consumers’ voracious appetite for streaming services like Netflix and Spotify and social media sites like 79彩票注册网址 and 79彩票注册网址. Big companies that provide the on-demand movies, music and business information need places to store and process all that data, and much of it sits in servers in nondescript, warehouse-style buildings around the country.
     
    Data centers don’t employ many people, but they expand the tax base. They also need a big power supply and access to high-capacity fiber optic cables, allowing their occupants to send and receive massive amounts of data in milliseconds. The Elk Grove Technology Park sits next to a big ComEd transmission line, and the utility is building a big substation nearby.
     
    "Elk Grove Village has become a focal point for Chicago data center activity with outstanding village support, reliable low-cost power and robust network infrastructure, making it an ideal location for both enterprise and hyperscale cloud companies in need of additional capacity," Pete Marin, CEO of Atlanta-based T5, said in a statement about its acquisition.
     
    T5 will build out its data center in a 164,000-square-foot structure at 200 Innovation Drive it acquired from Brennan. It’s one of four industrial buildings the developer has constructed on the west side of the park, which sits between Higgins Road and Oakton Avenue just east of Lively Boulevard. Last year, in its first deal in the park, Brennan leased 43,200 square feet in another 152,000-square-foot building there to Broetje-Automation, a manufacturer in the aviation and aerospace industry.
     
    Brennan Chairman and Managing Principal Michael Brennan did not return calls.
     
    It’s unclear precisely what Microsoft plans for its parcel, on the east side of the park. The move appears to fit with a broader strategy by the tech firm to buy land sites for data centers around the country and possibly build them itself, said Jim Kerrigan, managing principal at North American Data Centers, a brokerage with offices in Chicago and Nashville, Tenn. A Microsoft spokeswoman declined to comment, and Bateman declined to comment on the Microsoft sale.
     
    Journal & Topics, a newspaper serving the northwest suburbs, first reported the news of the Microsoft deal.
     
    Though the data-center market has been growing for the past several years, the last year has been slower after a very busy 2018, Kerrigan said. Nationwide, the amount of available data center space rose last year to 415 megawatts, a key industry measure of capacity, up from 375 megawatts in 2018, according to North American Data Centers. Projects totaling 359 megawatts were under construction last year, up from 246 megawatts in 2018.
     
    “The overall market just doesn’t feel as vibrant as it did a couple years ago,” Kerrigan said.
     
    79彩票注册网址 Yet the market for industrial property is as good as it has been in two decades. Primarily an industrial developer, Brennan expects to be busier this year than it was in 2019. The firm, which also has developments in Florida, Atlanta, Denver, Salt Lake City and Nashville, projects its total investment activity will rise to $1 billion this year, up from $700 million in 2019, according to a statement.

    7072彩票开户 7073彩票地址 963彩票开户 7073彩票网址 689彩票邀请码 7073彩票注册 8炫彩彩票app 677彩票开户 7073彩票登录 66顺彩票app
    Letter
    to the
    Editor

    Have something to get off your chest? You can?send us an email.?Or tell us on our page or on? @CrainsChicago.