Compass Eyes Sears' Old Site for Thriving Data Center Transformation

Revamping the Old Sears Site: A New Era of Data Centers

Once a symbol of corporate ambition, the former Sears headquarters in Hoffman Estates, Illinois, is set to undergo a significant transformation. The sprawling 274-acre property, which once housed over 5,000 employees, is now in the hands of Compass Datacenters of Dallas. The company plans to convert the vast office complex into a state-of-the-art data center, marking a shift in the real estate landscape.

From Retail Giant to Tech Hub

Sears moved its headquarters to Hoffman Estates in 1992, creating a mini-town complete with amenities such as a convenience store, day care, dry cleaners, and a health club. However, the rise of Walmart and Amazon led to a steady decline in Sears' business, and the once bustling corporate campus became a shell of its former self.

In mid-2021, Compass Datacenters acquired most of the property for $194 million. While the company has remained tight-lipped about its plans, it's clear that the future of the site lies in technology, not retail.

The Rise of Data Centers

Data centers are becoming increasingly important in our digital age. These facilities house the equipment necessary to manage internet data for multiple companies. Unlike traditional office buildings, data centers are designed to accommodate heavy equipment and often have minimal windows.

Compass Datacenters has secured a $367 million loan from Citizens Bank for future development on the property. The project is expected to provide about 250 megawatts of power, similar to the company's other mega projects in Dallas-Fort Worth and Phoenix.

Benefits for Hoffman Estates

Despite the reduced number of jobs compared to the Sears era, the new data center will bring several benefits to Hoffman Estates. The jobs created will be skilled and well-paid, and the facility will generate significant utility tax income due to its high power and water consumption.

Hoffman Estates has been proactive in attracting data centers, changing zoning laws to make them a permitted use in certain districts. The town's efforts have already paid off, with tech giant Microsoft planning a two-building complex in the area.

Chicago's Growing Data Center Market

The Chicago area is emerging as a leading U.S. market for data center growth. Major tech companies, including Microsoft, Oracle, Google, AWS, Meta, Apple, and ByteDance, are all active in the market, according to a report by real estate firm Cushman & Wakefield.

While the transformation of the old Sears site marks the end of an era, it also signals the beginning of a new one. As technology continues to evolve, the demand for data centers is only set to increase, reshaping the real estate landscape in the process.

Conclusion

The former Sears site is a prime example of how real estate trends are changing in response to technological advancements. As we move further into the digital age, we can expect to see more transformations like this one. For real estate investors and industry professionals, staying informed about these trends is crucial for success.