Done deal: Texas data center firm closes on deal for Sears campus in Hoffman Estates
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.
"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.
One way in which data centers stand out is their unusually high power consumption. Reardon said Compass likely confirmed the availability of enough power as part of its due diligence process ahead of the closing.
"Finding a solution for the whole site is a job well done by everybody," he added. "Once you get the power over there, this becomes the easiest 'yes' of all time."