Blackstone Purchases Chicago’s Iconic Willis Tower for a Reported $1.3B

by John Nelson

CHICAGO — Blackstone (NYSE: BX) has announced that Blackstone Real Estate Partners VII has entered into a definitive purchase agreement to acquire Willis Tower in downtown Chicago. According to the Chicago Tribune, Blackstone purchased the 110-story office tower from 233 South Wacker LLC for $1.3 billion.

“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,” says Jacob Werner, managing director of Blackstone’s real estate group. “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.”

Formerly known as the Sears Tower, the 3.8 million square-foot office building is the second-tallest office building in the United States and the fifth-tallest office building in the world. The skyscraper opened to tenants, including Sears, in 1973 but construction was formally completed in 1974. Sears Tower was sold to a collective ownership group comprising Joseph Chetrit, Joseph Moinan and American Landmark Properties in 2004 for $841 million. Sears Tower was renamed Willis Tower in 2009 due to the Willis Group consolidating its five Chicago-area offices into the tower.

Willis Tower features a top Chicago tourist attraction in the Skydeck on the 103rd floor, which provides 1.6 million visitors per year with views of Chicago and the surrounding area. Guests can enjoy their view from the “Ledge”, which are glass cubes that extend out from the building.

“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,” said a representative of 233 South Wacker LLC in a prepared statement.

Douglas Harmon of Eastdil Secured represented the seller in the transaction.

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 United States, 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’s stock price closed Friday, March 13 at $37.95 per share, up from $33.47 per share at this time last year.

— John Nelson

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