A Dallas-based firm has paid $194 million for the suburban Chicago headquarters of ever-shrinking retailer Sears, a site with buildings that are expected to be replaced with data centers in one of the biggest examples nationally of outdated corporate campuses giving way to new uses.
Compass Datacenters recently completed its purchase of 194 acres at 3333 Beverly Road in Hoffman Estates, Illinois, according to Village Manager Eric Palm.
Sears’ longtime headquarters, 2.4 million square feet of interconnected buildings northwest of Chicago, is expected to be knocked down to make way for an undetermined number of highly powered buildings for storing cloud data.
The sale continues a string of such deals throughout the country amid historically low office demand and an increased need for things such as data storage and logistics space. In another major project near Chicago, industrial developer Dermody Properties is in the process of replacing insurance giant Allstate’s former offices with warehouses.
It also continues the contraction of Sears, a retail behemoth when it moved to Hoffman Estates from the 110-story Sears Tower in Chicago — then the world’s tallest skyscraper, now known as Willis Tower — in 1992.
Transformco, Sears’ parent company, has been trying to sell the site since late 2021.
Hoffman Estates officials announced the Sears campus sale on the village’s website. Crain’s Chicago Business first reported Compass’ plans to buy the site in July, but the price has previously been unknown.
The sale was completed Tuesday, Palm said. The price was $194 million, he added.
The price is a bit below the $1 million-per-acre Dermody paid for the 232-acre former Allstate headquarters campus in Glenview, Illinois, also north of Chicago. That project recently landed its first tenant.
“We’re excited about having Compass in our community and helping to further cement the future of that business park,” Palm said. “Having a more than 2 million [square foot] building that was vacant, the value of the property has been declining. There’s not an office tenant out there for that large a space. We’re excited to have a tenant that we think is going to be a good fit.”
Compass declined to comment on specific plans for the property, but Chief Development Officer A.J. Byers said in an email to CoStar News that “this property is an ideal site for our first Chicago data center campus because of its proximity to robust 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,” he said in the statement. “This data center campus will deliver critical digital infrastructure to Chicago market that is built utilizing Compass’ industry-leading sustainability practices for every aspect of design, construction and operations.”
It’s unclear where, if anywhere, Transformco employees are based. The company is not in the property now, Palm said.
Transformco did not immediately respond to a request for comment from CoStar News on Friday.
Planning Data Centers
If it builds new data centers on the site, Compass will join several other companies that already have opened or are developing data centers in Hoffman Estates and nearby suburbs.
“They’re looking at data centers,” Palm said. “What those look like, the quantity, how it’s laid out, we don’t have that yet. We know they’re planning data centers.”
The size of the site previously was reported by CoStar News and other media as 274 acres, based on a description of the offering by Colliers International brokers. But some land Transformco owns within the Prairie Stone business park, but not adjacent to the portion bought by Compass, was not included in the deal, Palm said.
Although data centers bring relatively few jobs, a redevelopment by Compass would generate significant property tax revenue, Palm said.
The village in recent years amended zoning for the business park to make data centers an allowed use. Another use, such as a distribution center, would have required a zoning change, Palm said.
Village officials still must approve a site plan, he said.
“We were intentional about the rezoning and making data centers a permitted use in the business park because we thought that would be a good diversification of our tax base, to have this tech sector,” Palm said. “This is a low-intensity service use and whatever they wind up doing is going to be a significant investment, likely billions of dollars.”
This story was updated March 5 to correct the size of Sears’ headquarters campus from 197 acres to 194 acres.
For the Record
The seller was represented by Colliers International brokers Suzanne Serino, Anne Dempsey, Jason Simon and Dougal Jeppe.