The Willis Tower — which Chicago residents still refer to as the Sears Tower — will soon be getting a new owner. Blackstone Group LP has agreed to puchase the tower for $1.3 billion.
This is a significant transaction: The Wall Street Journal reported that the sales price is the highest for any office buiding in the United States not in Manhattan.
The transaction also brings a solid profits to the sellers. Joseph Chetrit and Joseph Moinian, both based in New York City, and Skokie, Ill.-based American Landmark Properties, spent $841 million for the then-Sears Tower in 2004.
Blackstone told the Wall Street Journal that the goal now is to make the Willis Tower an even greater draw for tourists. Blackstone plans to spend money to upgrade the building’s observation deck and retail areas.
Jacob Werner, managing director in Blackstone’s real estate group, said that the move made sense for his company largely because of the strength of the Chicago commercial real estate market.
“We are bullish on Chicago as companies expand within and move into the city and look for first-class office space,” Werner said in a written statement. “We see great potential in further improving both the building’s retail operations and the tourist experience for one of the most popular destination for visitors to Chicago.”
Blackstone is no stranger to the Chicago real estate market. The company in 2007 purchased a portfolio of properties gathered by Chicago real estate icon Sam Zell. Blackstone spent $39 billion on that portfolio. At the time, it ranked as the largest private-equity deal ever.