That campus, sold by futures exchange operator CME Group to CyrusOne last year for $130 million, already has two 400,000 square-foot-plus data centers and now can pursue construction of a third building of similar size on the same Diehl Road parcel of land.
The Aurora City Council this week approved annexation, zoning and variance resolutions smoothing the way for the expansion. In advance of their votes on Oct. 10, CyrusOne Senior Data Center Construction Manager Juan Vasquez told the council the third center would advance the company’s “grand vision” for the Aurora campus, with the next phase allowing increased data traffic.
CyrusOne’s purchase of the site in March 2016 included a 428,000-square-foot building and a series of transformers constructed previously by CME, and in the past 18 months CyrusOne quickly put up another 440,000-square-foot building on which it has just begun an interior buildout.
The expansion comes as demand for data center space surges, with Chicago the third-biggest market in the country for such capacity. CME initially built the data center to house aspects of its futures trading engine and pricing data flowing through its exchange, and later added co-location facilities for high-speed trading firm clients eager to be near its nexus.
But in recent years an explosion of demand from companies for cloud-computing capacity, to meet both consumer interest and employee needs, has led to other uses for such data centers.
CyrusOne CEO Gary Wojtaszek ultimately expects 75 to 80 percent of the campus to be sold to cloud companies. Amazon, Microsoft and Google are all competing to provide cloud-computing services. “We have nine of the 10 largest cloud companies in the world as customers,” Wojtaszek said in an interview.
The entire campus may ultimately be a $600 million to $700 million investment by the time it’s finished, and so far it’s about $250 million, he said.
The market has grown in the past 15 years as more businesses digitize their data and store it off-site on servers in leased data center space. The push by some companies to protect their data in redundant locations in the event of a disaster also has boosted demand. So has the growth of electronic and high-speed financial trading.
Not only are media and entertainment companies using the cloud to provide consumers with video games and to stream music and movies, but businesses are using more cloud-based applications, like Microsoft’s Office 365, that allow employees to access software from any location at any time.
Though data centers don’t employ many people, they employ lots of construction workers when they are being developed. And they generate property taxes and electrical transaction taxes.
CyrusOne has a network of data center facilities around the country, and it’s competing with other data center companies such as Digital Realty, which owns a major data center near McCormick Place in Chicago, to satisfy the cloud-computing craze driving demand.
“The extremely limited amount of available existing supply in the Chicago wholesale data center market continues to influence market dynamics,” CBRE’s research division said in a recent report on industry trends in the first half of 2017. The report said there are currently 40.8 megawatts of new capacity under construction in Chicago among the three largest providers, including Digital Realty, DuPont Fabros and CyrusOne.
The Diehl Road campus has 184 megawatts of “raw power” and the transformers that CME built was one of the key assets that attracted CyrusOne, said Brent Neumann, the data center’s operations manager. At any given time, it’s using up to 92 megawatts, allowing for another 92 megawatts as back-up.
CyrusOne also is mulling plans for erecting a communications tower on the site, Neumann said.
The votes by Aurora’s city council in favor of smoothing the way for the CyrusOne expansion were unanimous, and for his part, Aurora Mayor Richard Irvin is pleased to have the company growing in his city. He says the foundation for data center operators was laid years ago when the city began laying out an extensive fiber optic network.
Not only does the CyrusOne campus expansion create more jobs, mainly from construction of the centers, it brings additional tax revenue to the city, while the companies can skirt the cloud tax imposed by Chicago recently, Irvin said in an interview.