Chicago Colocation Market 2012

Written by Lisa Huff

Chicago has become an increasingly important market for data center operators. More than 35 data center firms have facilities in the Chicago area – mostly retail providers. Less than 10 of these are wholesale, retail hybrid or shell.

Data center demand in Chicago has historically come from telecom providers with ties into 350 East Cermak carrier hotel (now owned by Digital Realty Trust). In addition, since Chicago has grown into one of the top three financial hubs, the financial vertical has evolved into a primary driver of data center development. Also, Internet companies like Microsoft and Google and have developed data center space in Chicago and its suburbs over the last few years – in order to address bandwidth demands in the central US and to provide Internet coverage for this third largest city (by population behind New York City and Los Angeles) in the US. Multi-system operators (MSOs) like Comcast and Time Warner continue to grow their presence in this region as well, with Comcast taking 10ksq-ft in Ascent’s CH2 facility in 2011 and looking to add space this year and Time Warner in the market this year.

WiredRE’s recent analysis of this market shows several interesting trends:

• Large plots of undeveloped land in-and-around O’Hare are being considered for data center development.
• Northlake has attracted attention with Ascent moving in there with two large properties – one that was sold to Microsoft shortly after it opened.
• Dupont Fabros opened a new site in Elk Grove Village in 2008 and just recently expanded it, adding 40MW of capacity.
• There is a large shell in Franklin Park that has yet to be taken by any provider, but could add at least another 10MW of capacity.
• Incremental capacity has been/will be added to downtown Chicago by Red Sea Group (840 S. Canal) and JRM Technology (111 Cermak).

In our opinion, those providers seeking to establish themselves as national brands need to have product available in the Chicago colocation data center market and/or its suburbs in order to appease its financial sector, MSO and Internet data center customers who are among the fastest growing users of colocation in the country.

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