CHICAGO—The California Public Employees' Retirement System has just added another data center to its vast real estate portfolio, this time in Chicago at 601 W. Polk St. in the South Loop neighborhood. The acquisition was made through TechCore, LLC, a $1 billion fund created by CalPERS in 2012 and managed by GI Partners. It's another sign that institutional investors have a growing interest in this sector, which experts expect to grow tremendously as users put increased emphasis on cloud computing.
Although the price was not disclosed, Cook County records show that the new owner paid $17,485,000 to PI Data Hodings LLC for the former furniture warehouse, which was first developed in 1918. The latter firm bought the facility in 2011 for $10 million. TierPoint, a leading national provider of cloud, managed services and colocation, fully leases the roughly 107,000 square foot property on a long-term basis.
"We are pleased to own 601 West Polk and form a long-term relationship with TierPoint," said Mike Armstrong, principal of GI Partners. "The facility's robust infrastructure, connectivity, and location make it an attractive addition to the TechCore portfolio. We actively track the Chicago market, a top tier data center market with attractive fundamentals, and are excited to complete our first acquisition in the MSA."
CalPERS formed TechCore to acquire technology-advantaged properties, including data centers, internet gateways, corporate campuses for technology tenants, and life science properties located in core metro areas and leased to industry-leading tenants. Since 2012, TechCore has acquired over 2.9 million square feet of data center, life science, and office properties throughout the US.
"Companies have embraced the cloud as a solution for their IT platform," and this has created much of the demand for new space by the cloud providers, especially in the primary colocation markets, Chad Freese, a Chicago-based executive vice president at CBRE, told GlobeSt.com. He was not involved in this transaction. A recent report by CBRE predicted that cloud center data traffic will grow 32% annually through 2018.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
