Prime Group and Capri Interests have purchased another underutilized property in the Loop, for $12 million.
The Chicago-based developers, led by industry veteran Mike Reschke and frequent joint-venture partner Quintin Primo, acquired the 385,000-square-foot former Cboe Global Markets headquarters at 400 South LaSalle Street with plans to convert it to a data center, Costar reported. The price was just over $31 per square foot.
The purchase was financed with a $7 million loan from a Cboe affiliate, according to property records.
This six-story building, purchased last month from Cboe, is ideally suited for a conversion due to its column-free floors, high ceilings and structural capacity for data storage equipment, Prime Group’s Jeff Breaden told the outlet.
Colliers International brokers Holly Duran and Jeff Mulder, along with JLL broker Bruce Miller, represented Cboe in the deal. Prime Group and Capri Interests enlisted Cushman & Wakefield broker Alex Smith for data center leasing.
The data center will bring “more supply to a sector that has shown fast-growing demand for space and power capacity,” Reschke told the outlet.
The Chicago native is “not a seller.” He buys assets to hold them in perpetuity, he told The Real Deal recently.
“This is my city, this is where I invest, where I have all my money,” he said.
Cboe’s sale of 400 South LaSalle Street has been in the works since 2019 and occurred amid increasing office vacancies in the area. Major employers like Bank of America and BMO Financial have relocated from LaSalle Street to newer offices along the Chicago River and in Fulton Market.
Reschke and Primo have been at the helm of office-to-residential conversions in the Loop, and as LaSalle Street landlords, they’re supporters and recipients of Mayor Brandon Johnson’s efforts to subsidize redevelopment of office buildings in the corridor. The developers are also behind Google’s redevelopment of the Thompson Center.
Cboe no longer needed its old headquarters building after moving to the Old Post Office in 2020 and shifting its trading floor to the Chicago Board of Trade Building in 2022, a company spokesperson told the outlet.
Reschke and Primo had been planning to acquire and convert the Cboe building into a data center for over a year, as demand surged due to the rise in cloud computing and artificial intelligence.
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Data centers have proven to be a use for outdated office spaces, as seen with the redevelopment of the former Sears headquarters in Hoffman Estates. Data centers are also driving new construction, such as Google’s and CME Group’s cloud trading facility in Aurora.
The conversion of 400 South LaSalle is in the design phase, and the developers are working with ConEd to enhance the building’s power capacity to support 50 megawatts, Breaden said.
— Andrew Terrell