Chicago has become a top three market in the U.S. for data center absorption thanks to its central location and its prominence as a critical hub network, according to a new report from CBRE Group, Inc.
Net absorption totaled 36.2 megawatts (MW) in 2016, representing a near record-high for the market and outpacing the previous year’s absorption of 28 MW. The two markets ahead of Chicago are Northern Virginia (84.4 MW) and Dallas/Ft. Worth (37.6 MW).
2016 net absorption totaled 195 MW across the major data center markets (Atlanta, Chicago, Dallas/Ft. Worth, New York/New Jersey, Northern Virginia, Phoenix and Silicon Valley), nearly matching the 200+ MW of absorption in 2015. Leasing volume across the U.S. was dominated by a flurry of hyperscale cloud-service provider (CSP) requirements that sometimes reached in excess of 15 megawatts (MW) each.
“Chicago will continue to be one of the strongest data center markets in the country and the world due to its incredible central location,” said Todd Bateman, North American Agency Practice Leader, Data Center Solutions. “There is an incredible amount of mission critical infrastructure is in place in the market and demand continues to grow at an ever-increasing pace. The Chicago market has been a one of the most important market for data centers in the United States for decades and is well positioned to continue to enjoy a central role in the world’s digital economy.”
Current vacancy in Chicago is 5.2 percent and there is 17.4 MW of new construction in the pipeline. However, with tight vacancy and high demand, more construction is planned. Larger projects include an expansion at 350 East Cermak in Chicago, which could bring an additional 50 MW of critical load to the market, as well as a project in Aurora at the Chicago Mercantile Exchange facility that could add another 50 MW.