Digital Realty Sells Majority State in Elk Grove Village Data Centers

One of the nation’s largest data center operators is selling a majority stake in two Elk Grove Village properties, marking one of the biggest local tech real estate deals in years.

Austin-based Digital Realty Trust struck a deal with San Francisco-based GI Partners for its interest in the 485,000-square-foot building at 2200 Busse Road and the 305,000-square-foot property next door at 1400 East Devon Avenue, Crain’s reported.

The deal is being financed through a 10-year, $450 million fixed-rate loan from Barclays, Citigroup and Morgan Stanley banks. But it’s unclear how large GI’s stake will be and how much the firm is paid to acquire the majority stake. The transaction could place a $700 million valuation on the properties.

Digital Realty, led by CEO Andrew Power, became owner of the data centers in 2017 through a $5 billion acquisition of DuPont Fabros. The firm’s Chicago-are portfolio spans more than 3.4 million square feet, totalling over $2.4 billion in investments.

The deal also sheds light on the growing demand for data centers in the city and most of the country. While commercial real estate in Chicago continues to struggle, the city’s tech and industrial sectors are booming.

Data centers have become gaining traction in Elk Grove Village. Mayor Craig Johnson dubbed the village “the data center capital of the Midwest,” with 11 such properties operating in the suburb last year.

In March, developer Aligned bought the 177,000-square-foot office building at 50 Northwest Point Boulevard for $29.1 million. While the firm’s plans for the site are unclear, it’s possible that the building is redeveloped into another data center in Elk Grove Village.

Elsewhere in the village, Prime Data Center has a $1 billion project in the works.

—Quinn Donoghue