According to a recent article in the Wall Street Journal, Chicago’s iconic skyscraper formerly known as the Sears Tower has been sold for the second time in 11 years.
The Deal to Buy the Willis Tower
At $1.3 billion, 233 South Wacker LLC, the group that currently owns the tower, will be turning a profit of nearly $450 million, having bought the building in 2004 for $841 million. The purchase is a departure for the private equity group Blackstone, which is more widely-known for purchasing assets that have fallen into distress and are being valued below their potential. The purchase signals a rebound in commercial property values, which took a big hit during the recession, dropping by more than 30% between 2007 and 2009.
Blackstone says that it’s looking to capitalize on increasing interest from various companies to move into and expand in Chicago, seeking premium office spaces. It also sees great opportunity in the building’s retail and tourist appeal, seeking to expand retail spaces on the ground floors while revamping the observation deck to make it into one of the most accessible tourist attractions in Chicago.
The Tale of Two Towers
The purchase furthers the competition between Chicago and New York City, who have argued over whether the Willis Tower or the Freedom Tower in NYC is taller. The $1.3 billion price tag is the highest for an office tower in the U.S. outside of New York City.
The Willis tower stands 1,730 feet tall (including antenna), whereas the Freedom Tower is 1,776 feet tall at the tip of its antenna, reflecting the year of the Declaration of Independence. There has been a contentious back-and-forth between the two cities over whose is actually the tallest tower and what technically constitutes the “highest” point of a skyscraper (in terms of whether it’s the top of the structure or whether it also includes the antenna atop the structure).
Either way, these are two incredibly high-value properties, and it will be interesting to see how they are utilized and optimized in the future.