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September 2023

Texas data center firm closes on deal for Sears campus in Hoffman Estates

 

Sears Campus Hoffman Estates

From “Done deal: Texas data center firm closes on deal for Sears campus in Hoffman Estates” – Daily Herald

The former Sears campus in Hoffman Estates may now have a promising future to go with its storied past, as Dallas-based Compass Datacenters closed on its purchase of the 273-acre site Tuesday.

The move turns a page for Hoffman Estates and closes the book on Sears’ presence in the Chicago area, from where it helped shape the national retail industry for decades.

“Once you realize you’re not going to backfill 2.4 million square feet of office space, then the decision-making gets a lot easier.” – NAI Hiffman Senior Vice President – Office Services, Jack Reardon

“We are very pleased to welcome Compass Datacenters to Hoffman Estates,” Hoffman Estates Mayor Bill McLeod said in a statement. “The redevelopment of the former Sears headquarters into a data center campus begins a new chapter for this high-profile property and continues the technology diversification of our tax base. Although still preliminary, the investment by Compass will be in the billions of dollars and will have positive effects for our community for years to come.”

Representatives of Compass have not responded to requests for comment in recent weeks.

The company is in the process of being acquired by Brookfield Infrastructure Partners LP and the Ontario Teachers’ Pension Plan, according to a news release in June.

But CEO Chris Crosby’s statement at the time alludes to the ambitions demonstrated by Tuesday’s land purchase.

“The industry is at a critical inflection point today with AI and cloud demand continuing to fuel significant growth,” he wrote. “With Brookfield Infrastructure and Ontario Teachers’ strategic expertise and deep financial resources, Compass is ideally positioned to meet growing demand for hyperscale data centers and campuses.”

Hoffman Estates officials haven’t yet received a detailed proposal for the property, but the 2.4 million square feet of office space there seems destined for the wrecking ball.

Speculation about who could be in the market for the property began in December 2021, when owner Transformco announced the sprawling and well-maintained campus was for sale.

Jack Reardon, senior vice president of Oakbrook Terrace-based commercial real estate firm NAI Hiffman, said the post-pandemic state of the office-space industry led him to regard the property’s sale as the biggest challenge any broker could face.

The practice of simply demolishing unwanted office buildings wasn’t as common when the site went on the market as it’s become 21 months later, he added.

“Once you realize you’re not going to backfill 2.4 million square feet of office space, then the decision-making gets a lot easier,” said Reardon, whose company wasn’t involved in the marketing of the site.

Data centers are a relatively new factor in commercial real estate, Reardon said, noting that they fall into neither the office or industrial category. The lack of loading docks and truck traffic are a certain contrast from the latter.

“You can’t really protest a data center,” he said. “It’s just a big, giant building that doesn’t bother anyone.”

Such a use would seem to be ideal for the somewhat remote Sears campus that never boasted high visibility among its attributes, Reardon noted.


About NAI Hiffman:

NAI Hiffman is one of the largest independent commercial real estate services firms in the US, with a primary focus on metropolitan Chicago, and part of the NAI Global network. We provide institutional and private leasing, property management, tenant representation, capital markets, project services, research, and marketing services for owners and occupiers of commercial real estate. To meet our clients’ growing needs outside of our exclusive NAI Hiffman territory, we launched Hiffman National, our dedicated property solutions division, which provides property management, project services, and property accounting services across the country. NAI Hiffman | Hiffman National is an award winning company headquartered in suburban Chicago, with more than 250 employees strategically located throughout North America.

About Hiffman National: 

Hiffman National is one of the US’s largest independent commercial real estate property management firms, providing institutional and private clients exceptional customized solutions for property management, project management, property accounting, lease administration, marketing, and research. The firm’s comprehensive property management platform and attentive approach to service contribute to successful life-long relationships and client satisfaction. As a nationally bestowed Top Workplace, and recognized CRE award winner, Hiffman National is headquartered in suburban Chicago, with more than 250 employees nationally and an additional six hub locations and 25 satellite offices across North America.

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