Prime Data Centers to Develop $1B Chicago Project

3 min read

The campus marks the company's first foray outside of California.

Prime Data Centers’ Elk Grove Village Data Center Campus. Rendering courtesy of Gensler

Prime Data Centers is expanding outside California for the first time. The company plans to invest $1 billion in a new data center campus in Elk Grove Village, Ill. The three tri-level planned buildings are set to total 750,000 square feet.

The project is the result of a public-private collaboration between Elk Grove Village and Prime. Local officials approved the sale of four land parcels along Busse Road to the data center provider. The campus will be in Chicago’s Golden Corridor submarket.

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The hyperscale data center will have a total capacity of 150 MW upon full build-out. The project will be built in several phases, with construction activity planned to begin in “late summer 2022”, Jeff Barber, Partner and Executive Vice President of Sales and Business Development at Prime, told Commercial Property Executive. The first building is slated to come online in mid-2023.

Prime is targeting enterprise, Fortune 500 companies, technology and cloud clients, and will offer a ‘Partnership-as-a-Service’ model at its campus. This enables potential customers to access build-to-suit, turnkey, or powered shell options for their data center needs, according to Prime. Furthermore, joint venture models can be structured as well, enabling clients to own a percentage of the facility.

Barber also told CPE that construction activity is expected to generate several hundred jobs for the duration of the project. Upon completion, tenants of the campus would typically employ 20 to 40 workers for managing operations on a daily basis, while Prime expects to deploy 20 to 40 security and operations contractors.

Illinois’ data centers investment program offers various tax exemptions for owners and operators of such facilities. Prime stated that it will offer its clients access to these tax abatements at its new Elk Grove Village campus. To become eligible, the developer must invest at least $250 million over a 60-month period and create at least 20 full-time jobs with a compensation equal to or greater than 120 percent of the area’s median income. Another requirement is building a carbon-neutral facility or attaining certification under one or more green building standards.

Powering ahead

According to a JLL report, in the first half of 2021, Chicago had a total inventory of nearly 632 MW, with 18.5 MW under construction. Upon completion, Prime’s development would see the market’s size increase by 23.7 percent. Over the first six months of the year, Chicago had a net absorption of 20.1 MW, the same report shows. The metro was the fourth most in-demand market, closely trailing Phoenix—which had 26 MW of absorption over the same period.

Prime Data Centers is backed by Macquarie Capital, the advisory, capital markets and principal investment arm of Macquarie Group. In June this year, the Australian firm announced its partnership with Prime, aiming to leverage its resources to help the data center developer accelerate its 400-megawatt project pipeline. The partnership expects to target capital investments in excess of $5 billion over the next 10 years. In an interview with Commercial Property Executive, Prime Director of Marketing Jon Falker said that the partnership also aims to innovate the ways in which mission-critical infrastructure can be increasingly sustainable.

Prime currently has two ongoing projects in Santa Clara, Calif.—already preleased to Cyxtera—and another one in Sacramento, Calif. The company expects to grow in other locations as well, including European markets.

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