A developer of data centers agreed to buy Sears’ 274-acre headquarters campus in suburban Chicago, the latest example of sprawling office complexes in the area and across the country being targeted for new uses.
Compass Datacenters plans to buy the campus in Hoffman Estates, Illinois, and redevelop it into data storage space, according to people familiar with the deal.
The seller is Transformco, the parent company of the ever-shrinking department store chain that has been based in the complex at 3333 Beverly Road for more than three decades. The property went up for sale about 1½ years ago.
Dallas-based Compass Datacenters’ pending deal continues a recent run of developers proposing new uses for some of the largest office campuses in the Chicago area amid historically low demand for corporate space.
Industrial developer Dermody Properties already is razing Allstate’s 232-acre former headquarters campus in Glenview, Illinois, and replacing those buildings with modern logistics space. Bridge Industrial, meanwhile, is trying to win approval for its controversial plan to replace Baxter International’s 101-acre campus in Deerfield, Illinois, with distribution centers.
Also in Deerfield, LG Development wants to buy a 37.5-acre campus of former Walgreens Boots Alliance offices and replace the structures with an entertainment-focused mixed-use development. The deal, previously reported by Crain’s Chicago Business, has not been completed and still could fall apart.
National Wave of Deals
Similar projects, particularly office-to-industrial conversions, are playing out throughout the country.
It’s unclear whether any of the 2.4 million square feet of interconnected office buildings on the Sears site could be repurposed as part of Compass’ data center redevelopment or whether the entire site would need to be cleared.
Compass CEO Chris Crosby declined to comment to CoStar News. Transformco did not respond to a request for comment.
The Sears campus is within the nearly 800-acre Prairie Stone business park. A retail giant at the time, Sears moved there in 1992 from what was then the world’s tallest skyscraper, the 110-story Sears Tower — now called Willis Tower — in Chicago.
Prairie Stone also has retail, hotels and a city-owned arena that is home to the Windy City Bulls of the NBA’s development G League.
Sears’ longtime campus is within one of the areas where village officials amended zoning about 1½ years ago to make data centers as an allowed use. Hoffman Estates’ director of economic development, Kevin Kramer, declined to comment on Compass’ plan but said any data center proposal still would need to go through a formal zoning approval process.
“We have not been approached with specific plans yet,” Kramer told CoStar News.
Compass’ plans would replace space in one of real estate’s most challenged sectors with one that has continued strong demand as streaming content, e-commerce and other online functions use up more megawatts of data storage space.
Some data centers have sky-high values, as demonstrated in a recent recapitalization that valued a two-building property near Chicago at $900 million.
Hoffman Estates and nearby suburbs already have several data centers, and the Chicago area is among the largest in the country for the sector. The biggest market for data storage is Northern Virginia.
Microsoft, which is expanding its data-center complex in the area, is one tenant in Hoffman Estates.
“We see the benefits of data centers on certain sites, and we would like to see more of them,” Kramer said.
For the Record
The seller is represented by Colliers International brokers Suzanne Serino, Anne Dempsey, Jason Simon and Dougal Jeppe.