Market Memo

Chicago

One of the deepest U.S. connectivity hubs, with record-tight supply, where ComEd interconnection timelines and a hardening policy environment now gate the exurban expansion wave.

Gridlocked's directional read-through on this market's ability to convert AI infrastructure demand into buildable capacity.

Overall

Constraint

Urban infill costs

Saturation

Medium

Executive Summary

Chicago combines one of the deepest interconnection ecosystems in the country with record-tight market conditions — vacancy near 2%, new supply more than 90% preleased through 2027, and rents up roughly a third year over year. The expansion story has moved to exurban mega-sites: a $20 billion, up-to-1.8-gigawatt campus annexed in Joliet, Equinix's first Illinois hyperscale campus in Minooka, and Meta and Microsoft projects in DeKalb and Hoffman Estates. The constraint stack is utility- and policy-led: Exelon is studying tens of gigawatts of large-load requests with some delivery timelines stretching toward 2032, PJM capacity costs have repriced sharply, and Illinois paused new data center tax incentives effective July 2026.

Market Scorecard

Overall

Power

Fiber

Land

Water

Policy

Demand

Saturation

Medium

0–100 directional Gridlocked framework scores. Higher means a stronger relative buildability signal, not guaranteed investment upside. Saturation is shown as a qualitative constraint signal.

Constraint Stack

Primary constraint

Urban infill costs

Saturation risk

Medium

Enterprise demand and fiber density remain strong, but large campus expansion is more selective.

Saturation is a constraint signal — it reflects how much friction incremental growth faces, not whether the market is good or bad on its own.

Bull Case

If queue positions and transmission agreements hold, Chicago's fiber density, nuclear-anchored power supply, and spillover demand from saturated coastal markets can support sustained absorption, with grandfathered incentive agreements becoming a cost moat for committed projects.

Bear Case

Interconnection timelines reaching 2032, sharp PJM capacity-cost inflation, the state incentive pause, and litigation against the Joliet approval can slow the exurban pipeline and concentrate vacancy risk in speculative far-out sites.

Real Estate Read-Through

Powered, entitled near-in sites around the O'Hare and Elk Grove corridor screen at a premium against near-zero vacancy, while exurban farmland conversions are positioned on queue position, water solutions, and litigation outcomes rather than location alone.

Real Estate Market Data

Data center fundamentals

H2 2025 / Midwest

CBRE North America Data Center Trends H2 2025 ↗

Inventory

1,000.5 MW

Vacancy

1.90%

19 MW available

Available

19 MW

Under Construction

1,418 MW

Preleased

91.50%

of capacity under construction

Net Available Pipeline

120.6 MW

Asking Rent Midpoint

$160

$/kW/month

Power Delivery Timeline

2031 or later

Primary Constraint

Power

Additional metrics

Net Absorption

184.2 MW

Asking Rent Low

$145

Asking Rent High

$175

Prior Period Rent Midpoint

$142

Rent Growth

12.30%

Secondary Constraint

Capital requirements

Major Demand Driver

Hyperscaler

Key Takeaways

Vacancy is 1.90% with 19 MW available against 1,000.5 MW of inventory.

1,418 MW is under construction and 91.50% is preleased, leaving 120.6 MW of net available pipeline.

Prime Data Centers leased 72 MW to AI tenant in Elk Grove Village; Equinix announced first Illinois hyperscale campus in Minooka; PowerHouse Data Centers partnered with Hillwood on 1.8 GW campus in Joliet; CoreWeave became one of Chicago's largest tenants

No contiguous 5 MW+ space available; new development targets 500 MW+ power sites in suburban Chicago; ComEd requires 10-year letters of credit for projects 50 MW+

Market data sourced from CBRE North America Data Center Trends H2 2025 inputs entered into Gridlocked's market data workbook.

Source ID: CBRE_H2_2025_001

Key Risks

ComEd interconnection and delivery timelines stretching toward 2032

PJM capacity cost pass-through and ratepayer politics

Illinois incentive pause reshaping project economics after July 2026

Joliet water sourcing ahead of the Lake Michigan pipeline

Litigation risk against exurban annexations and rezonings

Public Market Read-Through

Public Exposure names that touch this market's constraint stack — potential beneficiaries and constrained exposures. Exposure can be positive, constrained, regulated, second-order, or mixed; this is read-through, not a buy list.

EQIX

Equinix

Equinix has direct exposure to AI and cloud infrastructure demand through its global data center and interconnection platform. The Gridlocked question is not whether demand exists; it is whether Equinix can continue converting that demand into powered, connected, high-value capacity in constrained markets. Its interconnection ecosystem is a strength, but growth still depends on power, site availability, cooling, and capital discipline.

DLR

Digital Realty

Digital Realty is a direct AI data center demand proxy, but Gridlocked treats it as a constrained operator: demand only matters when it can be converted into powered, connected, developable capacity.

CEG

Constellation Energy

Constellation is a public-market expression of the AI power bottleneck through clean firm generation, especially nuclear. The company does not solve land or fiber constraints, but it sits close to the question of whether data center growth can be matched with reliable, carbon-sensitive power supply. The exposure is meaningful, but outcomes depend on power prices, contract structures, regulatory treatment, grid constraints, and the economics of supplying large-load customers.

Data Status

Market memo content and scores are directional Gridlocked framework inputs based on public infrastructure, utility, site-control, water, demand, and saturation indicators. They are screening signals, not investment recommendations.