In one of the largest real estate deals in the United States, Blackstone Group LP (NYSE:BX) has confirmed that it will buy the Willis Tower in Chicago. The price agreed upon is reported to be $1.3 billion for the 110 storey office building, which was formerly the iconic Sears Tower.
The Blackstone Group LP (NYSE:BX) is one of the biggest real estate investors worldwide, with an estimated $81 million at its disposal. This huge investment was confirmed over the weekend as Blackstone is of the opinion that the city of Chicago has massive potential for future growth on account of large number of companies that are expanding and require quality office accommodation in the city.
Jonathan D. Gray, the global head of operations, at Blackstone grew up in the vicinity of Sears Tower and is convinced that Chicago is in for rapid development and the decision to buy the Tower made complete sense to the Group. The building comprises of 3.8 million square feet of high end office space and is currently the second tallest building in the United States. The Blackstone Group is known for its large real estate deals like takeover of Hilton Hotels in 2007.
Although, at present nearly 20% of the tower is vacant, the company feels that this will soon be occupied as there is a strong demand for office space in the area. Most of the rented office space is occupied by major corporations that include United Airlines.
On completion of all the necessary formalities and after Blackstone officially takes possession of the Tower, it plans to invest another $150 million to refurbish the existing amenities. Plans are under way to upgrade the retail space of the Tower along with improving the Sky Deck and the observatory on the 103 floor that offers an unparalleled view of the entire city of Chicago.
The viewing gallery will attract a large number of tourists and this will help generate better revenue for the management as in case of the Empire State Building in New York that gets almost half its revenue from tourism.
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