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A real estate firm has purchased the Northern Trust building in Chicago, and plans to spend $200 million to convert it into a data center. The former check processing plant in Chicago’s south loop was purchased by the Red Sea Group late last month for $35 million from Northern Trust Corp., Chicago Business Reports.
Last November the Red Sea Group launched Server Farm Realty (SFR) with projects in Washington state and Santa Clara, CA. Server Farm Realty builds wholesale data center space as well as custom solutions. The Red Sea Group, USA operates from El Segundo, CA.
The company hopes to have three floors ready for the data center by September and is financing this $70 million phase with funds from Red Sea and its partners, Data Center Knowledge reports. Red Sea Group is building its projects on speculation, without tenants confirmed prior to construction. New space in downtown Chicago is at a premium because of dwindling space available at the city’s primary data center hub, Digital Realty’s huge carrier hotel.
In a report released last week, Grubb & Ellis estimated there is demand for about about 15 megawatts of space in the greater Chicago market and just 7 megawatts of supply available.