A recently refurbished office site in Chicago, Illinois, might be pivoted to data center use amid a slow rental market.
As reported by Crain’s, the owners of 801 South Canal Street are looking to repurpose some or potentially all of the site from office space to data center use.
Landlord 601W spent some $265 million renovating the 683,000 sq ft (63,400 sqm) building, now known as Canal Station, but has reportedly struggled to fund leasers in a tough rental market and is having difficulty refinancing the site.
Further details of the data center plans have not been confirmed. The site is adjacent to a substation.
601W purchased the six-story building in 2019 for $68 million and renovations began in early 2021. Telos Group has been marketing the site for office use.
The redevelopment included replacing and doubling the size of the property’s windows, a new amenity center, fitness center, lounge, and terrace.
Construction consulting firm R.M. Chin previously signed a 15,475 sq ft (1,437 sqm) lease deal at the site, formerly known as the Northern Trust office building, but is now said to be looking elsewhere.
The property was originally built by a venture led by developer Paul Gearen for Northern Trust in 1990. The Chicago-based financial institution had been the building’s sole occupant until leaving in 2020 as part of an office consolidation program.
Despite leasing activity across Downtown Chicago reaching 9.1 million sq ft (845,417 sqm) in 2024 and hitting a post-pandemic high, Savills suggests leasing rates remain around 30 percent lower than 2019. Avison Young also suggests the office rental market in Chicago remains well behind pre-pandemic rates.
