CHICAGO—Both the US in general, and the Chicago market in particular, are poised for a boom in data centers, and REITs have started to sit up and take notice.
Ascent, for example, one of the nation’s largest providers of data center solutions, just sold its CH2 Data Center Facility in suburban Northlake to Carter Validus Mission Critical REIT, Inc. for $211.7 million. As part of the deal, CVMC REIT will provide new capital for an expansion of the facility and Ascent will continue to operate it and manage all development, design, construction and engineering.
Chicago’s reputation in the high-tech world has strengthened in recent years and the metro area has become one of the top regions for data centers, along with New York, San Francisco, Atlanta, Dallas and Washington DC, according to Patrick Davis, a senior design phase manager with Mortenson Construction who specializes in data centers.
“Of all of these cities, we have the lowest vacancy rates in our data centers,” he told GlobeSt.com, below five percent. And the growing use of computerized medical records, cloud computing and other factors has caused projections for “the demand curve for data centers to just go out of control.”
According to Phil Horstmann, chief executive officer of Ascent, this new partnership will allow the company “to concentrate on building out our current portfolio of data center facilities and increase strategic investment in the development of future locations. CVMC REIT’s commitment to the data center space is the perfect complement to our design, construction and operational capabilities, strengthening our ability to provide current and future customers with the innovative solutions and mission-critical services they demand.”
The Northlake facility has 250,000-square-feet and features Ascent’s Dynamic Data Center Suite model and colocation suites. It can accommodate a diverse range of tenants, from those that need less than 1 MW of gross power, to those that need 20 MW.
“Given this property’s desirable location and long term leases with high-quality tenants, we believe that CH2 is a great addition to our growing portfolio of mission critical real estate assets,” stated Michael Seton, president of Carter/Validus Advisors, the advisor to CVMC REIT.
“CH2 represents our largest single portfolio acquisition to date and demonstrates our continuing commitment to the data center space,” said John Carter, chief executive officer of CVMC REIT.