Sears finalized the sale of its 197-acre Chicago-area headquarters for $194M to Compass Datacenters as the onetime retail industry titan continues to shrink its already-small footprint.
The developer is expected to demolish the 2.4M SF existing campus of interconnected buildings at 3333 Beverly Road in Hoffman Estates and replace it with data centers to store cloud data, CoStar reports. Data center growth has accelerated rapidly in the Chicago area, with the main issue for projects being a lack of available land.
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“The redevelopment of the former Sears headquarters into a data center campus begins a new chapter for this high-profile property and continues the technology diversification of our tax base,” Hoffman Estates Mayor Bill McLeod said in a press release. “Although still preliminary, the investment by Compass will be in the billions of dollars and will have positive effects for our community for years to come.”
Transformco, Sears’ parent company, had been shopping the site since late 2021, after a 2018 Chapter 11 bankruptcy filing. Village officials confirmed the sale in July, but few details were known at the time.
In the past several years, Sears has shuttered almost all of its locations, including former stalwarts such as its Flatbush store in Brooklyn and Mall of America storefront. Sears closed its last department store in Illinois in 2021. As of early August, only 12 Sears department stores still existed, down from more than 4,000 at its peak, per ScrapeHero.
Compass Chief Development Officer A.J. Byers told CoStar in an email that the property is an ideal site for the company’s first Chicago data center campus because of its proximity to strong telecommunications fiber and its available power.
“We are working closely with the mayor and economic development team in Hoffman Estates to plan this data center campus in ways that drive economic growth and create jobs,” Byers told CoStar. “This data center campus will deliver critical digital infrastructure to [Chicago's] market that is built utilizing Compass’ industry-leading sustainability practices for every aspect of design, construction and operations.”
According to a first-half JLL data center report, Chicago's data center supply for the remainder of 2023 is largely leased or pre-leased. New submarkets are being created in Aurora and Hoffman Estates, though there are also significant increases in power and land constraints, per the report.
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