LIVE BLOG: Data Centers in Chicago event

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JLL’s Chicago data center gurus — Matt Carolan, Sean Reynolds and Andy Cvengros — are hosting a discussion on data center activity in the Chicago and U.S. market, the impact data centers are making on companies of all shapes and sizes, and new trends in the marketplace.

Also on the panel are consultant Paul Schlattman of ESD and real estate attorney Michael Rechtin of the law firm Quarles & Brady.

Here is a minute-by-minute recap of some of the highlights of their discussion:

5:35 p.m. — Carolan on the increasing demand for data center capacity. “From the simplest of terms, the traditional demands of data centers have increase exponentially over the past few years.”

5:36p.m. — Cvengros on the national landscape: “350 E. Cermak is the most valuable building in Chicago … More than the Sears Tower, more than any place else.”

5:37 p.m. — Cvengros: “In the 11 key markets nationwide (including Chicago), we’re tracking more than $2 billion of data center construction currently.”

5:38 p.m. — Carolan: “All of a sudden, Google and DripBox and Microsoft and Twitter … When the product is there, they’ll take down the space.”

5:41 p.m. — Reynolds: “The 3.3 million square feet of data center space in Chicago is pretty equally split between the city and the suburbs and there’s equal demand for both.”

5:43 p.m. — Cvengros: “users now longer want to be in the business of owning, operating and maintaining data centers.”

5:45 p.m. — Carolan: “when you thin about it, if you have a 50,000-square-foot office and a 1,000-square-foot data center, the data center is more valuable.”

5:47 p.m. — Cvengros: “Tier III has really become the standard nationwide. People really don’t look below that.”

5:49 p.m. — Schlattman: “The top four factors driving data center activity are energy efficiency, security, power capacity and virtualization.”

5:50 p.m.– Schlattman: “the primary trend within data center trends is outsourcing focused.”

5:54 p.m. — Schlattman: “The reason colos and wholesale facilities are so popular is because it’s really become a speed-to-market issue.”

5:56 p.m. — Schlattman: “Data centers at a Tier III level are at a $1,200 to $1,500-per-square-foot price point.”

5:59 p.m. — Carolan: “Here in Chicago, we’ve had 5 major data center built-to-suit for major corporations.”

6:05 p.m. — Carolan: “Anyone who’s looking at building a data center, you need to look at risk in addition to the financials.”

6:07 p.m. — Carolan: “The ‘total-cost-of ownership’ (TCO) analysis is critical to evaluating between colo, cloud and owned.”

6:10 p.m. — Rechtin: “The decision-making process around data centers involves a lot of players: IT, Real Estate, Finance, Legal, Brokers and Consultants. There are so many people that are involved in these transactions.”

6:13 p.m. — Carolan: “Data centers are one of the hottest asset classes going today … even among very conservative investors like pension funds. There’s a ton of downward pressure on cap rates.”

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