Today, office could be a boom or a bust depending on the market. For 601W, its recent completion of a $265 million downtown Chicago office redevelopment known as Canal Station, hasn't worked out as planned, as the company has faced hurdles over financing issues in a tough lending market. That has the developer hoping to now convert the asset into a data center property.
According to a report from Crain’s Chicago Business, 601W is seeking to re-purpose some or all of the asset at 801 South Canal Street. The plans call for at least some portion of the 683,000-square-foot building with computer servers or some form of technology that holds data, according to the local newspaper.
It comes as Crain's noted that lenders have been cautious about supporting office-related project efforts in downtown Chicago due to uncertainty in the area with vacancies. In addition, it reported that Canal Station is likely valued at less than its loan balance.
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As a result, 601W has struggled to secure tenants for the property formerly known as the Northern Trust office building due to the failure to secure new debt to pay down its $215 million construction loan, according to Crain's. For example, R.M. Chin, struck a lease deal and was set to occupy 15,473 square feet of space at the site by the end of the year. However, it does not appear that will move forward anymore, as the construction consulting firm is now looking at other office spaces in Chicago.
The original hope when 601W secured the construction for Canal Station was to revamp and add amenities to the property. But the office trend now has 601W looking elsewhere.
Not many CRE asset classes have been surrounded with as much hoopla as data centers. In fact, investors have been making big bets over the past year in the sector. In 2025, Blackstone's energy investment unit announced it agreed to acquire a 774-megawatt natural gas-fired power plant located in Loudoun County. Reuters reported the deal to be worth roughly $1 billion. Also, this year American Real Estate Partners said it would target data centers after raising $309 million from a fund and Harrison Street is doing the same after securing $600 million. But not many have been bigger than the January announcement from EDGNEX Data Centers by DAMAC, which said it would pour $20 billion into data centers and platforms.
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