ByteGrid Plunges Into Windy City
The newest player in Chicago-area data centers is actually a old name, with more than 705k SF portfolio in four markets. (So it's less like a rookie and more like a trade for a grizzled veteran.)
Northern Virginia-based ByteGrid has made its way to the Chicago area, acquiring CNA's flagship data center in Aurora in a sale and partial leaseback agreement. The 70k SF, Tier III data center (6MW power capacity) is in Chicago's underserved ‘burbs, EVP Don Goodwin tells us. As data centers become more important for a company's digital signature, companies are exploring sale-leasebacks, Don says. (Plus they help get rid of all those cumbersome filing cabinets you're always bumping into.) The deals allow for lower IT operating costs, and improved technologies help enterprises occupy a smaller footprint within their buildings.
We spoke with ByteGrid's Ken Parent about entering Chicago. While in general it's one of the nation's biggest data center markets (and ByteGrid historically focuses on secondary areas), Ken says the Aurora submarket is in a very large business community with no data center offering: "There was too many things about it that just made sense."
ByteGrid did something similar in Maryland, where it purchased a CitiBank data center (here), entering a big data center market in a under-utilized submarket. While CNA has leased back the center in Chicago, it's only using a portion of the space, leaving ByteGrid with the ability to lease some 25k SF. “We have plans to expand that over the longer run,” Ken says. Beyond Chicago, ByteGrid is exploring other second tier markets, but Ken declined to identify them. “We're talking to a lot of Fortune 500's with those assets that they don't know what to do with,” he says.
ByteGrid is targeting users such as downtown firms like CNA looking to offsite their data centers and suburban groups like content providers and government agencies. It'll also look for enterprises and government entities from other markets looking to expand into the Chicago area. Chicago's a provider's market with its supply constraints, Don says, and he expects more companies to embrace colocation at a multi-tenant data center as a way to solve their occupancy objectives. (It's not like the data minds if it's next to other data.)
