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The Willis Tower — formerly known as the Sears Tower — in Chicago. | Scott Olson/Getty Images

Willis Tower sale boasts highest price in Chicago’s hot office-property market

SHARE Willis Tower sale boasts highest price in Chicago’s hot office-property market
SHARE Willis Tower sale boasts highest price in Chicago’s hot office-property market

The Willis Tower’s sale to private-equity giant Blackstone Group looks to be the highest price for a U.S. office tower outside of New York.

It will bring upgrades to the skyscraper’s retail space and 103rd-floor observation deck, experts say.

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The deal for the former Sears Tower, announced officially on Monday and reported to total from $1.3 billion to $1.5 billion, would dwarf Chicago’s previous highest office sale price of $850 million for 300 N. La Salle in July 2014.

It could also top a $1.46 billion sale of One Market Complex in San Francisco in June 2007, and a $1.156 billion purchase by Amazon of its headquarters property in downtown Seattle in late 2012, according to data from property research firm Real Capital Analytics.

The San Francisco transaction was part of a portfolio sale by Blackstone Group following Blackstone’s 2007 buyout of Sam Zell’s Equity Office Properties Trust for $36 billion, according to Bloomberg.

Five properties in New York City have sold for more than $1.5 billion, topped by a $2.8 billion sale of the General Motors Building in Manhattan in 2008; a $2.2 billion sale of an office tower known as 3 Bryant Park on Jan. 15; a $1.72 billion sale of the MetLife Building in 2005; a $1.57 billion sale of the Travelers Complex in 2007, and a $1.52 billion sale of a tower at 1211 Sixth Ave. in Midtown Manhattan, according to the real estate data.

The Willis Tower sale takes advantage of Chicago’s increasingly hot commercial real estate market, the popularity of observation decks as tourist attractions, and the potential to make more money on the retail space in the building, experts said.

Jacob Werner, a managing director in Blackstone’s real estate group, said in a statement Monday that “we see great potential in further improving the building’s retail operations and the tourist experience for one of the most popular destinations for visitors to Chicago.”

Though the Willis Tower’s Skydeck and glass-ledge views attract 1.6 million visitors and take in more than $25 million a year, real estate sources say it lags other tourist sites such as the Empire State Building, which gobbles up $82 million in income from its 4.3 million visitors, according to the Wall Street Journal.

The sellers of the Willis Tower will make a killing on the sale, since they paid a then-record $840 million for the property in 2004. The sellers include Skokie-based American Landmark Properties, which describes itself as major real estate investors, managers, developers and marketers that “cause our properties to out-perform the competition.”

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