Blackstone Eyes $1.5 Billion Deal for Willis Tower

Mar 9 2015 | 1:34pm ET

Blackstone Group is mulling a preliminary $1.5 billion agreement to purchase Chicago’s tallest building, Willis Tower. 

The world's largest private equity real estate owner, Blackstone has been considering a deal for the 110-story tower after an extended period of due diligence.

According to reports, the Willis Tower generates roughly $10,000 in income each hour. The building, constructed in 1973, is 84% leasing property. The deal comes at a time that office sales volumes are at a seven-year high.

In addition to a massive amount of office space, the building earns money from its 103rd-floor Skydeck observation deck, retail and restaurant space, broadcast space and antennas, and tenant naming rights. Over the last three years, the SkyDeck has generated moer than $25 million in revenues. 

Pending the close of the proposed agreement, it would represent the 24th office deal in U.S. real estate history to surpass $1 billion. But this deal is particularly noteworthy due to the fact that it would be just the fourth billion-dollar deal outside of New York, and the first in the central part of the United States, according to research firm Real Capital Analytics. 

At $1.5 billion, the deal is worth roughly $400 per square foot in a building containing 3.8 million-square-feet if office space. The deal would nearly double the $850 million deal signed in 2014 for the 60-floor 300 N. LaSalle St. building. In that deal, ownership paid $652 per square feet.

Willis ownership recently hired Eastdil Secured to locate a buyer for Willis Tower. 


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