CIM Group and 1547 Critical Systems Realty bought a data center in the South Loop, their second acquisition of a South Side data center property this year.
Los Angeles-based CIM and Matawan, New Jersey-based 1547 bought the 66,000-square-foot building at 725 South Wells Street. The seller was Chicago-based Digital Capital Partners LLC.
The sale price was $15.9 million, according to Cook County records. The joint venture did not disclose a sale price.
The property has 5 megawatts of total capacity and is close to the massive data center at 350 Cermak Road, the largest in Chicago, according to the companies.
In July, CIM and 1547 bought a historic former South Side baking plant with plans to turn it into a 24 megawatt data center known as the Midway Technology Centre. The former Schulze Bakery property was the fourth data center location that CIM and 1547 acquired in the last 12 months. Besides the Chicago property, the others are in San Francisco, Cheyenne, Wyoming, and one outside of Toronto.
Chicago has grown to become the third largest market by data center inventory, behind Northern Virginia and Dallas/Fort Worth.
A surge in the construction of Chicago-area data centers ballooned the industry’s regional vacancy rate from 2 percent to 11 percent since last year. Pushed by growing demand for cloud-computing storage, developers built almost 57 megawatts of capacity — enough to power more than 16,000 homes — around the metro area since last year, according to CBRE data.
In addition to the two projects with 1547, CIM has partnered with Golub & Company in Chicago on several developments, including the massive redevelopment of the former Tribune Tower complex that includes plans for what would become the city’s second-tallest building.