A San Francisco-based data company is expanding its presence in Franklin Park.
“Digital Realty has worked on the purchase of the old Motorola property for about a year now,” said John P. Schneider, the village’s director of economic development. “And I think the new building they’re planning for that location may be done by this coming January.”
Currently, Digital Realty has two data centers located in Chicago, which generate nearly $500 billion in annual gross regional product in the manufacturing, transportation, green technology, and information technology industries, according to the company’s website. Its website indicates that it owns, acquires, develops and manages technology-related real estate, focused on handling the digital infrastructure for cloud-based computing, which allows people to stream movies, music and business data on their phones and computers.
In 2012, Digital Realty expanded into Franklin Park by purchasing the property at 9333-9377 Grand Ave.
Alfred Klairmont, president of Imperial Realty Company, announced Digital Realty’s purchase of the 18.5-acre former Motorola Headquarters property in Franklin Park, at 9401 W. Grand Ave., for an undisclosed sum on Aug. 4. Motorola originally developed the 269,014-square-foot office building and 487,700-square-foot industrial building on the property in 1953 as a TV assembly plant. However, it soon became an administrative office headquarters, employing more than a thousand professional and technical workers.
When Motorola moved to Schaumburg in 1976, the property became home to many different commercial users including Matsushita Industrial, Telecom Central and Houston Foods. The property had been vacant for at least 20 years when Digital Realty decided to redevelop it, according to Schneider.
Cook County property records show Imperial Realty paid $3 million in 1998 for the Grand Avenue property. Two years later, the real estate firm divided the property, selling off one piece with a 269,000-square-foot office building for $5.5 million to a New York based investor that planned to redevelop it. However, previous plans to redevelop the former Motorola property didn’t come to pass, so Imperial bought the office building back for $100,000, county records show.
Jon Boilard, the manager for corporate communications, said on Aug. 22 that he wasn’t able to comment on the acquisition. However, according to Digital Realty’s Aug. 16 filings with the Securities and Exchange Commission, as of June 30 the company’s portfolio includes an aggregate 140 properties as well as 14 properties held as “investments in unconsolidated joint ventures.” The company’s filings also reported the acquisition of eight properties during the 12 months that ended on June 30.
“Our portfolio of properties consists primarily of technology-related real estate and data center real estate in particular. A decrease in the demand for, or increase in supply of, data center space, Internet gateway facilities or other technology-related real estate would have a greater adverse effect on our business and financial condition than if we owned a portfolio with a more diversified tenant base or less specialized use,” the filing said. “We have invested in building out additional inventory primarily in what we anticipate will be our active major metropolitan areas prior to having executed leases with respect to this space. We believe that demand in key metropolitan areas, such as northern Virginia, Dallas and Chicago, is largely in line with supply.”
Currently, 8.2 percent of the company’s portfolio, including the 14 properties held as investments in unconsolidated joint ventures, is concentrated in Chicago.
Digital Realty is seeking a zoning variance for a business office, parking lot, and data center at their newly acquired property, Schneider said. He said pursuing technology-based businesses is part of his strategy to diversify Franklin Park’s tax base while also leveraging its reputation as an attractive manufacturing center in the O’Hare basin.
“This is part of a high-tech corridor we want to bring to Grand Avenue in the village,” he said. “And Digital Realty’s purchase provides an anchor business for that.”
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He said Digital Realty plans to install and pay for a new electrical substation to handle their new data center’s increased use of the village’s electrical grid. So, in addition to new property taxes, Digital Realty’s new facility should bring substantial electrical tax revenue to the village once the data center is up and running, Schneider said.
Alex V. Hernandez is a freelance reporter for Pioneer Press.