Data centers in Chicago, Illinois are critical to the Midwest and South U.S., as well as Canada, in addition to facilitating low-latency connectivity to major East and West coast colocation markets. While the city’s connectivity-rich carrier hotels, from providers like Digital Realty and Equinix, are located in the downtown area of Chicago, the large-scale, purpose-built wholesale data centers, from operators such as Digital Realty, have a dominant position in Chicago’s western suburbs.
In total, Chicago, Illinois has over 105 data centers with more than 550 megawatts of multi-tenant commissioned power. The market’s established data center presence has been driven by Chicago’s central location, lower power costs, relatively cool climate, and low natural disaster risk.
Dgtl Infra provides an in-depth overview of data centers in Chicago, Illinois, including their power, connectivity, and customer characteristics. Additionally, we highlight Chicago’s most critical data centers, such as 350 East Cermak Road – where Digital Realty and Equinix operate – as well as Digital Realty’s wholesale Elk Grove and Franklin Park campuses. Finally, Dgtl Infra identifies numerous reasons as to why there are so many data centers concentrated in Chicago and its surrounding suburbs.
Chicago Data Centers – Overview
Chicago, Illinois and its neighboring suburbs, comprise the fifth-largest data center market in the United States with more than 105 data centers and over 550 megawatts of multi-tenant commissioned power. With a population of 2.7 million, Chicago is the third-largest city in the U.S. and the broader Chicago-Naperville-Elgin metropolitan statistical area (MSA) holds the third-largest GDP in the country.
In the Midwest, Chicago serves as the center of finance, industry, technology, telecommunications, and transportation. As such, Chicago’s data centers are home to three major financial and futures exchanges, namely the: NYSE Chicago (formerly Chicago Stock Exchange), Chicago Board Options Exchange (CBOE), and Chicago Mercantile Exchange (CME).
Geographically, Chicago’s central location in the U.S. makes it well-suited for business continuity and disaster recovery operations, given that it can serve enterprise and IT service provider demand arising from both East and West coast markets.
Locations
In the Chicago market, data centers are located in two distinct areas: downtown and in the city’s western suburbs. Historically, Chicago’s data center market formed downtown, however, since the mid-2000s, the majority of the market’s new data center capacity has come in the city’s western suburbs.
Downtown
Downtown Chicago’s connectivity-rich retail colocation facilities cater to smaller deployment sizes and focus on serving financial services firms (e.g., Goldman Sachs and Citadel), which require network-dense, low-latency connectivity to each other and to top global financial markets. Also, content and network service providers are key customers of downtown Chicago data centers.
Western Suburbs
Chicago’s large-scale, purpose-built wholesale data centers are situated in the city’s western suburbs, particularly in Elk Grove Village and Franklin Park, Illinois, which are located near O’Hare International Airport. Additionally, further data centers are scattered around the nearby cities and villages of Itasca, Lombard, Mount Prospect, Northlake, Oak Brook, and Westmont, Illinois.
Even further west, in Aurora, Illinois, another data center cluster has emerged led by large-scale facilities from CyrusOne, a wholesale operator.
Overall, Chicago’s western suburbs allow data center providers to secure multi-acre plots of land at prices that have been, and continue to be, much cheaper than the city’s downtown.
Power
Commonwealth Edison (ComEd) is the largest electric utility in Illinois and the sole electric provider in Chicago. Illinois is a deregulated electricity market, meaning that the state is a competitive market, thus, prices for electricity are lower than the national average.
To this end, electricity rates in Chicago average between $0.06 to $0.07 per kilowatt-hour (kWh), placing Chicago among the lower power rates for Tier-1 data center markets in the United States. Albeit Texas (particularly Dallas), which competes with Chicago as a central U.S. data center location, offers lower electricity rates that average between $0.04 to $0.06 per kilowatt-hour (kWh).
READ MORE: Dallas Data Centers – Everything is Bigger in Texas
Connectivity
Chicago’s connectivity is characterized by having three main carrier hotels, namely Digital Realty’s 350 East Cermak Road in downtown Chicago (which is also a key site for Equinix and Cyxtera), as well as CoreSite’s 427 South LaSalle Street and QTS’ 2800 S Ashland Avenue, which are both located in downtown Chicago.
These facilities are the primary connectivity hubs for internet traffic in the city and the entire Midwest region due to the number of network service providers on-site and their ability to offer low-latency interconnection services.
Chicago’s robust fiber connects the East, West, and Gulf (Southern) coasts of the United States with direct connectivity to Canada, positioning the market as a key interconnection point in North America. For example, enterprise and dark fiber providers operating in Chicago include AT&T, Charter Communications, Cogent Communications, Colt, Comcast, Crown Castle, Everstream, Frontier Communications, Lumen Technologies, Verizon, Windstream, and Zayo.
Finally, three of the largest peering hubs or internet exchange points (IXPs) in the Chicago market are the Chicago Internet Exchange (ChIX), AMS-IX Chicago, and DE-CIX Chicago.
Data Center Customers in Chicago
Chicago experiences a diverse mix of demand for its data center capacity from enterprise, connectivity, and hyperscale customers.
In terms of enterprises, the Chicago metro area is home to the headquarters of 35 Fortune 500 companies, including AbbVie, Allstate, Archer-Daniels-Midland, Discover Financial, Exelon, JLL, McDonald’s, Motorola Solutions, State Farm, United Airlines, and Walgreens. Therefore, companies utilizing data center capacity in the Chicago market include those in the financial services, insurance, technology, telecommunications, manufacturing, and healthcare sectors.
Regarding hyperscale customers, Chicago’s data center demand has mainly come from cloud service providers (CSPs) and large internet companies such as Amazon Web Services (AWS), Apple, Google, Meta Platforms (Facebook), and Microsoft.
Overall, demand for data center capacity in Chicago has been volatile during the past several years, with 2020 reaching over 70 megawatts of absorption, while 2018 and 2019 recorded only ~15 megawatts of absorption. Still, Chicago’s vacancy rate recently touched 7.5% (down from all-time highs which were double), highlighting the improving supply and demand dynamic in this market.
Types of Data Centers in Chicago – Colocation, Wholesale, Cloud
In Chicago, there are three main types of data centers: retail colocation, wholesale, and cloud / hyperscale. Examples of the top data center providers in Chicago from each category are listed below:
| Retail Colocation | Wholesale Data Center | Cloud / Hyperscale |
| Equinix | Digital Realty | Microsoft Azure |
| CoreSite | CyrusOne | Meta Platforms (Facebook) |
| Cyxtera | QTS Data Centers | Amazon Web Services (AWS) |
| TierPoint | STACK Infrastructure | Apple |
In total, over 40 multi-tenant data center providers serve the retail colocation and wholesale segments of Chicago. For downtown, a significant portion of Chicago’s market absorption has come from deployments in the 500-kilowatt to 1.5-megawatt range. While in the city’s western suburbs, such as Elk Grove Village and Franklin Park, Illinois, recent market absorption has been from larger deployments in the 5-megawatt to 20-megawatt range.
READ MORE: Colocation – Definition, Meaning, Data Center, Services
Below we provide further detail on Chicago’s most important retail colocation provider (Equinix), wholesale data center operator (Digital Realty), and cloud service provider (Microsoft).
Equinix – Data Centers in Chicago
Equinix operates 5 data centers in the Chicago area which collectively comprise over 358,500 square feet of colocation space. The company’s colocation data centers are located downtown at 350 East Cermak Road (CH1, CH2, CH4), as well as in Chicago’s western suburbs of Elk Grove Village (CH3) and Westmont (CH7).
Below is a further breakdown of Equinix’s 5 colocation facilities in the Chicago area:
| Data Center | Code | City | sqft |
| 350 East Cermak Road, 5th Floor | CH1 | Chicago | 50,992 |
| 350 East Cermak Road, 6th Floor | CH2 | Chicago | 58,852 |
| 1905 Lunt Avenue | CH3 | Elk Grove Village | 196,151 |
| 350 East Cermak Road, 8th Floor | CH4 | Chicago | 23,614 |
| 111 Plaza Drive | CH7 | Westmont | 28,900 |
| Total | — | — | 358,509 |
350 East Cermak Road – Equinix CH1, CH2, CH4
Equinix’s primary Chicago data center is located at 350 East Cermak Road in Chicago, Illinois and comprises the following three facilities:
- CH1: 350 East Cermak Road, 5th Floor
- CH2: 350 East Cermak Road, 6th Floor
- CH4: 350 East Cermak Road, 8th Floor
Together, Equinix operates nearly 133,500 square feet of colocation space at its 350 East Cermak Road data center in Chicago, via its CH1, CH2, and CH4 suites. Notably, Equinix leases this space at 350 East Cermak Road from wholesale data center operator Digital Realty (discussed next). In turn, as a retail colocation provider, Equinix resells capacity at this location to its own customer base.
Through its 350 East Cermak Road colocation facility, Equinix offers connectivity to over 195 competing network providers and 290 total participants – making it the densest interconnection hub in the Chicago market.
Digital Realty – Data Centers in Chicago
Digital Realty operates 10 data centers in the Chicago area which collectively comprise over 3.43 million net rentable square feet (NRSF) and 163 megawatts of white space IT load. The Chicago presence of Digital Realty also includes data centers in the cities of Elk Grove Village, Franklin Park, and Northlake, Illinois.
In the market, Digital Realty’s important carrier hotel is located at 350 East Cermak Road in downtown Chicago, Illinois. Additionally, Digital Realty operates another, much smaller colocation facility in downtown Chicago at 600-780 South Federal Street.
Digital Realty – Data Center Campuses in Chicago
Digital Realty delivers large-scale facilities to cloud service provider (CSP) and large internet customers, such as Microsoft and Apple, out of its data centers in Elk Grove Village and Franklin Park, referring to these sites as its Elk Grove Campus and Franklin Park Campus.
350 East Cermak Road – Digital Realty
Digital Realty’s data center at 350 East Cermak Road in Chicago, Illinois is one of the largest data centers in the world, offering 109 megawatts of utility power capacity / 70 megawatts of UPS power capacity, across 1.13 million square feet of space.
Known as the Lakeside Technology Center, the building is located in the Prairie Avenue District of Chicago’s Near South Side area, which is only a short distance away from Chicago’s financial district.
Digital Realty operates the main meet-me room (MMR) at 350 East Cermak Road, which facilitates connectivity to over 70 network providers.
Elk Grove Campus – Digital Realty
Digital Realty’s Elk Grove Campus is located at 2200 and 2299 Busse Road, as well as 1400 East Devon Avenue in Elk Grove Village, Illinois. Comprising over 1.1 million square feet of space, with access to 160 megawatts of utility power capacity, this campus supports large-scale workloads from hyperscalers, such as the cloud service providers (CSPs) and internet companies.
Franklin Park Campus – Digital Realty
Digital Realty’s 40-acre master-planned Franklin Park Campus is located at 9333, 9355, and 9377 Grand Avenue in Franklin Park, Illinois. Totaling 595,700 square feet of space, with access to 56 megawatts of utility power capacity, this campus supports large-scale workloads from hyperscalers, such as the cloud service providers (CSPs) and internet companies.
Cloud / Hyperscale
Cloud service providers (CSPs) and over-the-top (OTT) media service companies, collectively known as hyperscalers, are actively developing new data centers in Chicago. Specifically, Microsoft Azure, Oracle Cloud, and Meta Platforms (Facebook) are hyperscalers with a meaningful and/or growing data center presence in Chicago:
Microsoft Azure
Microsoft Azure’s North Central US cloud region, known as northcentralus, has 1 availability zone and is located in Chicago, Illinois.
READ MORE: Microsoft Azure’s Regions and Availability Zones
Oracle Cloud
Oracle Cloud’s US DoD North cloud region, known as us-gov-chicago-1, has 1 availability zone and is located in Chicago, Illinois. Additionally, Oracle is planning to open its next U.S.-based Commercial data center region in Chicago, Illinois.
READ MORE: Oracle Cloud’s Regions and Availability Zones
Meta Platforms (Facebook)
In 2020, Meta Platforms (Facebook) broke ground on its Dekalb, Illinois data center campus located at the ChicagoWest Business Center, with its initial buildings expected to come on-line in 2022. In aggregate, the company is building 2 data centers at this campus, comprising more than $800 million of investment, which will ultimately span a total of 907,000 square feet.
READ MORE: Facebook’s 18 Data Centers and $20 Billion Investment
Amazon Web Services (AWS)
Presently, Amazon Web Services (AWS) does not have a cloud region in Illinois. However, the company has an AWS Local Zone facility in Chicago, with its parent region being US East (Northern Virginia).
READ MORE: Amazon Web Services (AWS) Regions and Availability Zones
Why are There So Many Data Centers in Chicago?
In Chicago, there are so many data centers because of the city’s central location, lower power costs, relatively cool climate, low natural disaster risk, and tax incentives to promote data center growth.
1) Location
Chicago’s central location in the U.S. makes it well-suited for business continuity and disaster recovery operations, given that it can serve enterprise and IT service provider demand arising from both East and West coast markets.
2) Power
At an average range of $0.06 to $0.07 per kilowatt-hour (kWh), Chicago has relatively low power rates for Tier-1 data center markets in the United States.
3) Climate
Chicago’s average annual temperature is low and the market has the second fewest number of cooling degree days (CDD) among all Tier-1 data center markets in the United States – after Northern California (Silicon Valley).
READ MORE: Northern California Data Centers – Silicon Valley
However, Chicago has relatively higher humidity, a negative for data centers, and stronger water use restrictions, which impacts the use of water for data center cooling.
4) Natural Disasters
Chicago faces a low risk of natural disasters.
5) Incentives
Since 2019, the State of Illinois has offered a data center tax incentive, which particularly promotes new data center construction or expansion. For example, qualifying data center projects are exempt from paying sales tax on the equipment used inside the facility, such as storage, servers, and liquid cooling solutions.
What are the Challenges to Chicago’s Data Center Market?
While Chicago’s data center market possesses strong demand drivers, the region also faces certain fundamental challenges to data center growth, including a lagging economy, poor transportation infrastructure, and intense competition on lease pricing.
- Economy: historically, Chicago has lagged in GDP growth at only ~2.5% annually, as compared to 3%+ for the U.S. average. Additionally, Chicago’s unemployment rate remains higher than the national average
- Transportation: according to J.D. Power’s 2022 North America Airport Satisfaction Study, Chicago’s O’Hare International Airport ranks second from the bottom, in terms of overall customer satisfaction, for “Mega Airports” in the United States
- Competition: lease pricing is competitive for wholesale and hyperscale transactions from both providers in Chicago and alternative Tier-1 data center markets in the United States, such as Dallas, Texas. Moreover, Chicago has another 550 megawatts of further capacity under planning, led by new competitors CloudHQ and Prime Data Centers, which could result in a doubling of Chicago’s data center inventory
READ MORE: CloudHQ Plots $2.5bn, 250+ MW Data Center Campus in Chicago
READ MORE: Prime Data Centers Eyes $1bn, 150 MW Data Center in Chicago
