T5 Data Centers Acquires Property for Chicago Expansion

T5 Data Centers is expanding its operations in the Greater Chicago market with the purchase of a 164,000-square-foot data center shell in the Elk Grove Technology Park in Elk Grove Village, Ill., the company said today.

T5 will develop the building as a data center with 15.4 megawatts of power and 103,000 square feet of white space. Elk Grove Village is adjacent to O’Hare Airport, and its access to regional infrastructure has made it the locus of data center development in the Suburban Chicago market.

“We’re excited to grow in the Chicago data center market where we continue to have tremendous success,” said Pete Marin, CEO of T5 Data Centers. “Elk Grove Village has become a focal point for Chicago data center activity with outstanding Village support, reliable low-cost power, and robust network infrastructure, making it an ideal location for both enterprise and hyperscale cloud companies in need of additional capacity.”

T5 Data Centers has a long-standing track record of developing mission-critical facilities in the Chicago market, where it currently operates three data centers.

Tax Package Boosts Chicago Opportunity

Tenants in the new T5 project will be able to qualify for tax exemptions following the state’s recent passing of a bill providing benefits to data center construction projects. Data center projects now will receive exemptions from state and local sales taxes on data center equipment for 10 years if they invest a minimum of $250 million in the facility and create 20 high-paid full-time jobs.

Chicago is one of the nation’s premier markets for data center services, occupying a central place in America’s geography and mission-critical infrastructure. The Windy City is a major hub for Internet and financial infrastructure, with active communities of data center users and service providers.

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The region has also become a favored location for hosting, colocation and cloud computing companies. Chicago sees strong demand from the enterprise sector as well, both for primary data centers and as backup/disaster recovery facilities.

New players continue to enter the Chicago data center market, while incumbent providers are adding space to accommodate future demand. RagingWire/NTT Data Centers and Iron Mountain are each building large facilities in Suburban Chicago, where NYI (New York Internet), Element Critical and SBA Communications have entered the market through smaller deals.

Elk Grove Technology Park, formerly known as Busse Farm, was purchased in early 2018 as part of a $1 billion development project led by Brennan Investment Group. The business park is a focal point for regional fiber optic system infrastructure, and spans 85-acres in the O’Hare marketplace.

“Our latest T5 site has all the characteristics that qualify it as being the best comprehensive data center site in the Midwest,” stated David Horowitz, T5 Data Centers SVP.

Experienced Player in Wholesale Development

T5 Data Centers is a 10-year-old company, and was an early player in the market for build-to-suit wholesale data centers, initially focusing on single-tenant facilities for marquee tenants. T5 helped establish western North Carolina as a key data center destination, and soon expanded to Atlanta, Los Angeles, Portland, Colorado Springs, suburban New York, Chicago and Ireland.

In 2014 the company launched its T5FM facilities management arm, which gained strong traction, adding 11 new facilities as clients in 2018.

Last year T5 Data Centers announced an investment from global real estate company QuadReal Property Group, along with plans to create a platform to provide “holistic” solutions for enterprise and hyperscale users. QuadReal and T5 say they will launch a fully-integrated platform to develop, acquire and operate data centers.