Dwarfing any single-building deal in Chicago real estate history, Blackstone Group reportedly purchased the Willis Tower over the weekend for $1.3 billion, according to stories in the Tribune and MarketWatch. The later publication's scoop quotes Blackstone reps as saying they plan to turn the tower into even more of a tourist attraction and cash cow by investing in roughly $150 million in upgrades of the retail space and Skydeck, among other things, hoping to build on the $25 million in revenue collected annually from visitors to the second-highest building in North America. (for comparison, similar attractions at the Empire State building bring in $82 million per year). Blackstone's previous claim to fame in Chicago was another mega-deal, purchasing Sam Zell's Equity Office Properties Trust for $39 billion in 2007, then the largest private equity deal in history.
While the sale price is a drop from the $1.5 billion Crain's predicted for the tower, it still made for quite a nice windfall for Joseph Chetrit, Joseph Moinian and American Landmark Properties, who paid $840 million for the then-Sears Tower in 2004. And the deals aren't done yet. Eastdil, the broker for the sale, is also pushing naming rights for the Skydeck and the open space at South Wacker Drive and West Jackson, hoping someone wants to develop a hotel on site. According to MarketWatch, the sale is a sign that there aren't many distressed properties left since the real estate world has bounced back from the bubble.
·Blackstone strikes deal for Chicago's Willis Tower [MarketWatch]
·Blackstone to buy Willis Tower for $1.3 billion, news report says [Tribune]
·Previous Willis Tower coverage [Curbed Chicago]