A data center portfolio operated by Element Critical in Chicago’s Elk Grove Village has received $71.5 million in refinancing.
The two facilities, acquired by Safanad in 2019, are slated to receive some of the funding for future upgrades. Phillips Realty Capital structured the debt financing for the loan provided by Annaly Capital Management Inc. Phillips also previously helped Element Critical secure $67 million in refinancing in 2019, for its Northern Virginia facility.
Data center and IT infrastructure provider Element Critical is jointly owned by Safanad and its partner, Industry Capital. The 2019 acquisition was followed by a commitment of at least $40 million in upgrades to the portfolio, Element Critical CEO Ken Parent said in prepared remarks at the time.
The facilities, Chicago One and Two, are situated across the street from each other, at 711 N. Edgewood Ave. and 341 Haynes Drive in Wood Dale, Ill. The Tier III facilities were constructed in 1982 and total just under 115,000 square feet of raised floor space supported by an existing 8MW of power capacity, expandable to 15MW. Both are multi-tenant, carrier-neutral data centers with immediate support for high-density deployments.
Room for growth in 2021
According to a recent CBRE report, overall demand for wholesale data centers across primary markets fell by 11 percent in 2020. Despite the initial slowdown caused by the pandemic, the sector is expected to grow this year.
At the end of last year, Chicago had roughly 33.7MW under construction, while the vacancy rate reached 14.8 percent, the same report showed. The market is poised to grow and vacancy to contract, with tax incentives also expected to attract more hyperscalers to the area.
Element Critical operates five data centers across four major U.S. markets—Northern Virginia, Silicon Valley, Chicago and Houston. The latest addition to its portfolio was last month’s acquisition of Houston-based Skybox Datacenters’ facility.