Willis Tower, the nation's second tallest office building and a famous Chicago landmark, has been sold to the Blackstone Group, reports New York Times.
The 110-story tower was acquired for $1.3B, making it the most expensive office tower sold in Chicago, and even in the whole U.S., excluding New York City, according to the Chicago Tribune.
Blackstone Group, a huge equity real estate investor company with $81B under its management, bought the Chicago landmark from 233 South Wacker LLC, reports CNN. The sellers, reportedly had an enormous profit from the sale, as they only bought if for $840M in 2004.
Although the sellers had passed the ownership to Blackstone, they still believed in the Willis Tower's value as a real estate asset. They even issued a statement about it having been an excellent investment to them. They also predicted that the new owners "will continue to be an excellent steward of this world-famous building," reports USA Today.
This recent purchase of the equity giant group is a slight deviation from their business portfolio lately. The Blackstone Group usually buys companies and properties on the cheap spectrum, but now delves into buying the Willis Tower, says CNN.
Yet, being an equity group, it also recognizes good investments and proceeds into buying such assets even with high price tags. Blackstone purchased Equity Office Properties Trust for $39 billion in 2007, the largest private equity deal in history, notes the Chicago Tribune.
Blackstone Sees Willis Tower as a Good Investment
So, the group invests on the Willis Tower because it sees it as both a tourist attraction and has a large play on Chicago's growing business district, according to CNN.
Jacob Webner, a Blackstone executive initially explained their move. As quoted by CNN, he said, "We are bullish on Chicago as companies expand within and move into the city and look for first-class office space." He followed it with, "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." Blackstone plans to invest $150M to push its tourism attraction even more, notes the Chicago Tribune.
Moreover, the tower is not that expensive either, according to The Wall Street Journal. Its price per sq. ft is only $340---such a small fraction of a luxury office towers' normal price, it adds.
The 1,730 ft. tower was formerly known as Sears Tower, named for retailer Sear Robuck & Co. and was opened in 1973. It was renamed Willis Tower in 2009 after the insurance broker Willis Group Holdings leased the naming rights, reports CNN.
Willis Tower stands a bit shy to New York City's Freedom Tower's height of 1,776 feet, according to CNN.
