Chicago has become one of the most in-demand data center markets in the country, according to the latest research from JLL.
In fact, JLL, in its second-half 2023 North American Data Center Report released in March, said that the Chicago market today is seeing unprecedented demand for data center space.
According to JLL, the Chicago market boasted more than 5.04 million square feet of data center space as of the end of 2023. Of that space, only 405,227 square feet was vacant. This lack of available space means that it can be challenging for data center users to find the square footage they need.
Some relief is coming, though. JLL reported that more than 2.28 million square feet of new data center space was under construction in the Chicago market as of the end of 2023. An additional 2.03 milllion square feet of data center space was planned.
The demand for Chicago-area data center space was also evident in the area’s absorption numbers. According to JLL, users absorbed 297.2 MW of data center space in the Chicago market in the second half of 2023, a big jump from the 88.5 MW absorbed in the first half of the year.
JLL said that Chicago is still seeing strong absorption in early 2024, too, across existing and planned data centers.
This doesn’t mean that the Chicago market doesn’t face challenges. As JLL says, the Chicago area faces power constraints that could make it difficult to build the mega-data centers that so much users want. The local market also faces higher labor costs and a shortage of buildable land.
JLL says that other markets with more available power and plentiful land pose a major threat to siphon data center business from the Chicago market.
Despite these challenges, the future looks bright for the data center market in Chicago, as demand doesn’t look to be slowing anytime soon. JLL pointed to new developments set to deliver in 2025 and 2026 as evidence of this. These developments include data centers being built for T5, Prime, NTT, CyrusOne, CloudHQ, Aligned and Edged Energy.
Chicago is far from the only North American market seeing rising demand for data center space. JLL reported that in the second half of 2023 that the primary North American data center markets saw 3.4 GW of transactions signed, bringing the full year total for the year to a record of 4.3 GW. Secondary markets added 124 MW of absorption in the second half of 2023 and a total of 554 MW for the year.
Northern Virginia ranked as the largest North American data center market in 2023 with 1.6 GW of transactions.
