Prologis, among the global leaders in industrial real estate, has taken another major step into the data center market with the sale of a newly developed turnkey data center in Illinois.
With the deal for the sale announced last December, partnering with Skybox Datacenters, Prologis had initially converted one of its existing warehouses into a 32 megawatt (MW) facility, demonstrating as far back as 2021 the growing appeal of adaptive reuse for digital infrastructure.
As reported by Data Center Dynamics’ Dan Swinhoe:
“Skybox said the facility was located in the Elk Grove village area of the city. Images shared by Skybox and Prologis suggest it was Chicago 1, the data center the two companies completed in early 2022 […] DCD reached out for more information. Prologis confirmed Chicago 1 has been sold; the powered shell has been completed, with the turnkey development is in process. The facility spans 190,000 sq ft on a ten-acre site.”
The converted facility’s buyer, HMC Capital, sees this acquisition as a marquee asset for its newly launched DigiCo Infrastructure REIT, which targets high-quality data center investments across the United States and Australia.
The deal highlights the rapid evolution of Prologis’ data center strategy and the increasing convergence of industrial real estate and digital infrastructure.
Prologis’ Growing Presence in Data Centers
Prologis is no stranger to data center development, having been featured in prior DCF coverage for its strategic moves into the rapidly burgeoning sector. The Illinois project reflects Prologis’ focus on unlocking higher-value uses for its vast portfolio of warehouses.
According to Dan Letter, President of Prologis, “Warehouse conversions in key markets offer a compelling growth opportunity while delivering outsized returns to our investors and meeting customer demand for digital infrastructure.”
To support this strategy, Prologis has aggressively scaled its power procurement capabilities, securing 1.6 gigawatts (GW) globally, with an additional 1.4 GW in advanced stages of procurement.
The company’s in-house data center expertise has also expanded, with industry veterans like Laramie Dorris, former EVP of Global Design and Construction for Yondr Group, joining Chris Curtis and the rest of the team. These efforts align with Prologis’ vision to develop approximately 20 data center opportunities and invest $7-8 billion over the next four years.
Curtis, Prologis’ Global Head of Data Centers, emphasized the company’s unique position: “Our portfolio of approximately 5,600 buildings and 12,400 acres of land offers unparalleled opportunities for identifying higher-value conversion projects.”
A Transformative Partnership with Skybox
This latest venture underscores the strength of the Prologis-Skybox partnership. Skybox Datacenters, known for its PowerCampus solutions, has been at the forefront of innovative data center design and development.
Skybox CEO Rob Morris highlighted the strategic alignment between the two companies: “By leveraging proven development expertise, innovative design partnerships, and deep utility relationships, Skybox and Prologis have delivered a world-class facility in Illinois.”
Skybox has consistently delivered high-quality infrastructure for hyperscalers and enterprise customers, and its collaboration with Prologis continues to expand the boundaries of data center evolution.
HMC Capital’s Strategic Acquisition
The new Illinois data center will serve as a flagship property for HMC Capital’s DigiCo Infrastructure REIT, which is launching with a portfolio valued at AUD $4.3 billion.
David Di Pilla, CEO of HMC Capital, called the Illinois facility a “world-class turnkey data center” and emphasized its strong position in a Tier 1 market with long-term contracted cash flows.
As the demand for AI-driven workloads and cloud computing continues to surge, facilities like this Illinois data center are becoming critical components of global investment strategies.
The acquisition reflects a broader trend in the data center industry: the growing appetite among institutional investors for high-quality digital infrastructure assets.
Convergence of Industrial Real Estate and Digital Infrastructure
Prologis’ adaptive reuse strategy represents a significant shift in the way industrial real estate assets are utilized. By converting warehouses into data centers, the company is tapping into one of the most lucrative sectors of the digital economy.
This approach also underscores the strategic value of Prologis’ vast property portfolio in high-barrier, high-growth markets—a theme echoed in DCF’s ongoing analysis of adaptive reuse trends.
Prologis’ unmatched advantages of scale, as boosted by Skybox’s cutting-edge design expertise, provides a blueprint for how future data center development can be increasingly tied to the innovative reuse of existing industrial assets.
As seen by the way Prologis and Skybox are moving forward, such adaptive reuse partnerships are undoubtedly playing a pivotal role in shaping the next generation of data center infrastructure.
Notable Adaptive Reuse Projects in Chicago
As the trend toward adaptive reuse is reshaping urban and suburban landscapes, Chicago stands out as a leader in leveraging its industrial heritage to power the digital economy. The city has emerged as a key hub for data center adaptive reuse projects, with several notable developments in the news in 2024.
Among the highlights:
The Digital Realty Development at Elk Grove Village – Digital Realty converted a former manufacturing facility into a 36 MW data center. The project showcases the city’s robust infrastructure, including access to power and fiber connectivity, which makes it a prime location for hyperscale and enterprise customers.
Stack Infrastructure’s Downtown Chicago Campus – Stack Infrastructure has been redeveloping a historic industrial site into a state-of-the-art data center campus. With a planned capacity exceeding 50 MW, the project reflects the growing trend toward urban data centers that can serve AI and edge computing needs.
CoreSite’s Expansion in Mount Prospect – CoreSite recently transformed a logistics warehouse into a multi-tenant data center with a 20 MW capacity, catering to cloud providers and enterprise clients. This facility emphasizes modular construction techniques to accelerate deployment.
Such projects highlight the adaptability of Chicago’s industrial real estate landscape, as well as the city’s appeal to data center developers due to its strategic location, reliable power grid, and robust fiber network.
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