Compass Datacenters could be the next developer to completely transform a suburban office campus and join Chicago’s thriving data center industry.
The Dallas-based firm, led by CEO Chris Crosby, is under contract to buy the 274-acre Sears headquarters at 3333 Beverly Road in Hoffman Estates, west of Chicago, Crain’s reported.
Terms of the contract have not been disclosed.
Sears’ parent company, Transformco, listed the sprawling office property in early 2022, throwing in the towel amid low demand for office space and a plummeting retail sector, both of which were triggered by the pandemic.
Compass was acquired by Brookfield Infrastructure Partners and the Ontario Teachers’ Pension Plan for $5.5 billion in June, which could affect the company’s redevelopment plans. A huge overhaul of the property is likely to require a lengthy approval process from Hoffman Estates officials.
If the deal goes through and Compass gets the greenlight, the company would likely raze much of the site and build big warehouse-like structures that house servers and other computer gear, the outlet said.
The Sears headquarters is one of several office campuses in Chicagoland poised for a massive makeover. Dermody Properties bought the former Allstate campus for $232 million last year, with plans to convert the site into five warehouses totaling more than 1.2 million square feet. LG Group recently struck a contingency deal to buy the 37.5-acre Walgreens Boots Alliance office complex in Deerfield, aiming to turn it into an entertainment and retail complex.
Chicago’s data center and tech scene continues to boom, partly because of Illinois’ various tax breaks and incentives it offers for such developments. In 2020 and 2021, the state granted a total of $274.8 million in tax benefits for 13 data center projects in Illinois, the outlet said.
Data Center developer Aligned has spent at least $78 million to acquire roughly 36 acres across several office properties in the area that look primed for redevelopment. In March, Microsoft acquired a 30-acre industrial site in Hoffman Estates for $41.5 million, expanding its data center operation in Chicagoland.
“The rapid growth of artificial intelligence — along with other modern technologies, such as streaming, gaming and self-driving cars — is expected to drive continued strong data center demand,” according to a report from CBRE.
There are challenges that come with the exploding industry, though. Data centers use gobs of electricity, and utility companies are struggling to keep up with the increased demand.
—Quinn Donoghue
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