Rental Giant Purchases Chicago’s Willis Tower

March 17, 2015

The 110-story Willis Tower in downtown Chicago is getting new owners. The Wall Street Journal reports that Blackstone Real Estate Partners VII is purchasing the 3.8 million-square-foot office building, which was formerly known as the Sears Tower. Blackstone is reportedly paying $1.3 billion for the building, which is the second tallest in the United States.

The real estate firm has become bullish on Chicago’s office market, says Jacob Werner, managing director of Blackstone’s real estate group. Werner says the firm plans to upgrade the building’s 103rd floor "skydeck" in the hopes of drawing more tourists, much like the Empire State Building, which attracts about 4.3 million visitors annually and gets 40 percent of its total annual revenue from the tourism segment.

"We see great potential in further improving both the building’s retail operations and the tourist experience for one of the most popular destinations for visitors to Chicago," Werner says. 

If $1.3 billion does end up being the final price, as reported, the sale would be the highest paid for an office tower outside of Manhattan, the CoStar Group reports.

Willis Tower, originally built in 1973, was once the world’s tallest building until 1998. It is now the second tallest in the U.S. behind 1 World Trade Center in New York City, which stands at 1,776 feet (including its spire). Willis Tower stands at 1,450 feet. The building was renamed from the Sears Tower to Willis Tower in 2009 after insurance broker Willis Group Holdings Ltd. replaced Sears as the building's anchor tenant.

Source: "Blackstone Confirms Deal to Buy Chicago’s Willis Tower," CoStar Group (March 16, 2015)