Digital Realty Sells Majority Stake in Elk Grove Village Data Centers in $450M Deal
The sale of a majority stake in two Elk Grove Village data centers by Digital Realty Trust to GI Partners represents one of the largest tech real estate deals in recent years, reflecting data centers’ growing prominence and value in the commercial real estate sector. This transaction, financed through a $450 million, 10-year fixed-rate loan backed by Barclays, Citigroup, and Morgan Stanley, underscores the continued demand for data centers amid a global shift toward cloud computing and data-heavy applications, despite broader challenges in the commercial real estate market.
Elk Grove Village has established itself as a key data center hub, often dubbed the “data center capital of the Midwest.” The two properties involved in this transaction—a 485,000-square-foot data center at 2200 Busse Road and a 305,000-square-foot facility at 1400 E. Devon Ave.—testify to the suburb’s strategic location for data-driven infrastructure. Commercial real estate agents in Elk Grove Village should recognize the increasing value that data centers bring to the local market, as well as their role in cementing the area’s position as a critical player in tech-driven real estate.
The appeal of data centers lies in their ability to support the global demand for digital services, from cloud computing to streaming. This demand has driven vacancies to record lows, with developers struggling to keep up with the pace of new projects. For Elk Grove Village, the influx of data centers contributes to economic growth, job creation, and a heightened profile within the tech industry. The presence of major industry players like Digital Realty, which has invested heavily in the Chicago market with a local portfolio valued at more than $2.4 billion, further validates the strategic significance of this area.
For investors like GI Partners, acquiring a majority stake in these Elk Grove data centers offers a foothold in a high-demand asset class that continues to perform strongly even as other segments of the commercial real estate market face headwinds. The transaction could value the properties at over $700 million, demonstrating the premium placed on data center assets due to their role as critical infrastructure in the digital age. Commercial real estate agents can leverage this trend to attract more tech and data-focused investments to Elk Grove Village, emphasizing the suburb’s established reputation and growth potential.
Digital Realty’s decision to sell a majority stake in these properties is also noteworthy. As one of the world’s largest data center owners, Digital Realty’s ongoing investments and strategic partnerships reflect the evolving landscape of tech-oriented real estate. For commercial property management professionals, the increasing presence of data centers presents unique challenges and opportunities, from ensuring uptime and energy efficiency to navigating security protocols tailored to data-heavy facilities.
Elk Grove Village’s prominence in the data center market has been further bolstered by major new projects, such as a $2.5 billion development just over the border in Mount Prospect. This growth trajectory indicates sustained demand and a robust outlook for the region’s tech real estate market. As data consumption and cloud services continue to expand, commercial real estate agents in Elk Grove Village should position themselves to capitalize on these trends, helping connect developers, investors, and businesses to properties that meet their evolving technological needs.
In conclusion, the sale of a majority stake in Elk Grove Village’s data centers by Digital Realty Trust to GI Partners exemplifies the strength and growth potential of data center investments in the region. This transaction offers commercial real estate agents an opportunity to highlight the area’s strategic importance, attract further investment, and showcase the resilience of tech-focused assets amid broader market uncertainties. As demand for digital services continues to rise, Elk Grove Village stands ready to maintain and expand its status as a premier data center destination in the Midwest and beyond.
