The tallest building in Chicago has a new owner. MarketWatch, the news web site owned by Dow Jones, broke the news that the Blackstone finished up negotiations over the weekend to buy the Willis Tower (233 South Wacker Drive) for $1.3 billion. It’s the highest price ever paid for a building not in New York City.
The good news is that Blackstone tells MarketWatch it actually plans to invest money into the iconic tower, returning it to trophy status through upgrades to the retail space and SkyDeck Chicago, the observation level.
So, does this mean the Willis, nee Sears, Tower will become the Blackstone Tower? Probably not. Willis has a deal that lets it pay a million dollars a year for the naming rights to the building as along as it maintains a certain amount of office space there. The insurance company still has ten more years on its lease.
Updated —March 16, 2015 @ 11:02am:
For such a massive transaction for such a huge building, Blackstone put out an itty bitty press release about it:
Blackstone and 233 South Wacker LLC Announce Definitive Agreement for Sale of Chicago’s Willis Tower
NEW YORK & CHICAGO, Mar 16, 2015 (BUSINESS WIRE) — Blackstone and 233 South Wacker LLC today announced that they had signed a definitive agreement for Blackstone Real Estate Partners VII to acquire Chicago’s Willis Tower. The Willis Tower is a 3.8 million square-foot office building in downtown Chicago and, at 110 stories, is the second-tallest office building in the United States and the fifth-tallest office building in the world. The building also features a top Chicago tourist attraction in the Skydeck on the 103rd floor, which provides 1.6 million visitors per year with unmatched views of Chicago and the surrounding area including from the “Ledge”, glass cubes which extend from the building.
Jacob Werner, a Managing Director in Blackstone’s real estate group, said, “We are delighted to be acquiring this iconic building on behalf of our limited partners. We are bullish on Chicago as companies expand within and move into the city and look for first-class office space. Moreover, 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.”
A representative of 233 South Wacker LLC said in a statement, “This is simply a unique asset in real estate in the United States and has been an excellent investment for us. We are very happy that Blackstone is buying it and know that they will continue to be an excellent steward of this world-famous building.”
Special thanks from the seller to Douglas Harmon of Eastdil Secured, who was the exclusive representative on the transaction.
Further terms of the transaction were not disclosed.
Blackstone is a global leader in real estate investing. Blackstone’s real estate business was founded in 1991 and has approximately $81 billion in investor capital under management. Blackstone’s real estate portfolio includes hotel, office, retail, industrial and residential properties in the US, Europe, Asia and Latin America. Major holdings include Hilton Worldwide, Invitation Homes (single family homes), Logicor (pan-European logistics), SCP (Chinese shopping malls), and prime office buildings in the world’s major cities. Blackstone real estate also operates one of the leading real estate finance platforms, including management of the publicly traded Blackstone Mortgage Trust.