Sears Tower Adds Tenants, Plans Name Change
- Mar 13, 2009
Chicago’s office trends aren’t much different from the rest of the country as companies of all sizes are terminating their leases or are downsizing, but the Sears Tower is as popular as ever. About a week after expanding the lease for a major tenant in the tower, the building may be changing its name to the Willis Tower after global insurance broker Willis Group Holdings inked a lease in the world-famous Chicago high-rise.Under an agreement with the building’s owners, the Chicago icon and tallest building in the Western Hemisphere will be renamed Willis Tower, according to Willis Group Holdings information.Willis plans to consolidate five area offices and move nearly 500 associates into the tower occupying more than 140,000 square feet on multiple floors. Willis said its move to the new space, at $14.50 per square foot, will result in significant real estate cost savings, and that there is no additional cost to the company associated with renaming the building. In addition to the Willis lease, International Marketmakers Combination expanded to an additional 34,000 square feet and also signed an 11-year lease renewal at the tower, according to a March 4 CoStar Group report. The trading company, also known as IMC Chicago, will occupy a total of 56,286 square feet on the entire 43rd floor, the report stated.IMC Chicago has expanded several times since moving into the building in January 2007. It currently occupies 18,390 square feet on the 46th floor. This recent deal is a major lift to the Sears Tower since the biggest tenant, Ernst & Young, decided to move out of the building to a new location, the CoStar report stated.According to published reports, vacancy in the Sears Tower is about 18 percent. The total CBD office vacancy rate for Chicago is about 13.1 percent, according to Grubb & Ellis Company’s Fourth Quarter Chicago Office Market Trends newsletter. Relocating to Willis Tower will be three current Willis HRH offices in Chicago and two suburban locations. The move is expected to be completed by late summer. The company’s North American business is now known as Willis HRH following Willis’ October acquisition of insurance intermediary Hilb Rogal & Hobbs (HRH). Chicago is the headquarters of Willis HRH’s Midwest Region. Willis Tower also will be home to Willis Commercial, a business unit dedicated to serving the insurance needs of small and medium-sized enterprises. Willis’ Innotech business, a high-tech service center for healthcare benefits clients, will be housed in the Willis Tower offices. First built in 1973, the building is owned by 233 S. Wacker Drive L.L.C., a real estate investment group formed in 2004 to purchase the tower for about $840 million. Ownership includes New York City-based partners Joseph Chetrit; and Joseph Moinian and Steve Bederman of The Moinian Group; and Yisroel Gluck and John Huston, of American Landmark Properties Ltd., based in Skokie, Ill. U.S. Equities Asset Management L.L.C., headquartered in Chicago, provides management and leasing services to the property. Michael Kazmierczak, senior vice president of U.S. Equities, represented the building in negotiations. Josh Kuriloff, vice chairman, and Kent Ilhardt, executive vice president of Cushman & Wakefield, represented Willis. Chicago’s office suffers just like the rest of the country with companies terminating their leases or are downsizing. The planned new Hines development in the West Loop is in jeopardy due to credit issues, according to the Grubb & Ellis Company’s Fourth Quarter Chicago Office Market Trends newsletter. On Jan. 22, CPN reported that a deal inked by Franklin Street Properties Corp. on Oct. 31 for the $130 million purchase of Chicago’s 16-story Congress Center fell through. According to an SEC filing, Franklin Street elected to terminate the agreement on Jan. 13. No reason for the termination of the agreement was listed on the report. On Oct. 31, Franklin reported to the SEC that it had entered into an agreement to purchase 525 West Van Buren Street in the west loop of Downtown Chicago. The 16-story office tower with approximately 522,000 square feet of rental space was completed in 2002. Grubb & Ellis Realty Investors markets the property and published reports list the firm as the owner.