UA to Move HQ to Willis Tower, Space to Total Over 800 KSF
- Aug 14, 2012
In what is reportedly one of the largest office lease transactions in Chicago’s history, United Airlines will take an additional 205,000 square feet of space in the city’s iconic Willis Tower, formerly the Sears Tower.
The tower is already home to United’s Network Operations Center and will become home to the airline’s corporate headquarters as part of the deal. Once the move-in is complete, United will occupy nearly 25 percent of the 110-story, 4.5-million-square-foot building. The transaction also extends United’s lease through 2028.
Molly Carroll, David Matthews and Steve Stratton of Jones Lang LaSalle represented United Airlines. Mike Kaz and Derek Rolison represented U.S. Equities Realty, the tower’s leasing and management company.
In March 2007, United began moving its headquarters downtown from its campus in northwestern suburban Elk Grove Village to 77 W. Wacker Drive, becoming the name tenant there. In 2009 the airline, the world’s largest, announced that 2,800 more jobs would move downtown. UA began moving its operations into Willis Tower in fall 2010 following an initial lease of 470,000 square feet.
United increased its space commitments in 2011 to a total of 625,000 square feet. This latest lease adds a further 205,000 square feet, bringing United to a total of 830,000 square feet on 16 floors.
Once the move is complete, United will have more than 4,000 employees working in downtown Chicago (reportedly all in Willis Tower) and more than 14,000 total in the city, including its operations and reservations center at O’Hare International Airport. There is reportedly no specific timetable for completion of the move.
With this transaction, the building is 82 percent leased. Since 1992, when Sears began its departure from the building, the structure has sometimes struggled with high vacancies. Not including sublease space, the rate hit 21.8 percent in 2006.
U.S. Equities Realty, which took over leasing and management from CBRE in April 2007, has completed more than 4 million square feet in leases at the building, more than half of that within the 2 1/2 years. Significant leases have included 217,000 square feet with Schiff Hardin LLP in 2008, 140,000 square feet with Willis Holdings in 2009, and 83,000 square feet with Tressler LLP in 2011.
One small but notable recent upgrade was the 2009 opening of The Ledge, a series of four glass balconies that extend more than four feet from the tower’s western face at the 103rd floor Skydeck Chicago. The skydeck attracts more than 1 million visitors annually; views can reach nearly 50 miles on a clear day.
Willis Tower is owned by an investment partnership known as 233 S. Wacker Drive LLC. The partnership includes The Chetrit Group, led by Joseph Chetrit; The Moinian Group, led by Joseph Moinian; both based in New York, and American Landmark Properties, led by Yisroel Gluck and John Huston, in Skokie, Ill.
A United spokesperson told Commercial Property Executive that the airline’s office (and former headquarters) campus in Elk Grove Village, immediately west of O’Hare, totals about 988,000 square feet on 66 acres of land. There’s no word yet on what will happen there once United completes the move to the Willis Tower.
At a height of 1,450 feet, Willis Tower is the tallest building in the Western Hemisphere. Originally opened in September 1973, it occupies an entire city block and has its own zip code.