Willis Tower Owner Signs Lease with ESD
June 22, 2017
By Alby Gallun
CRAIN'S CHICAGO BUSINESS
As it embarks on a $546 million renovation, the owner of Willis Tower has landed another tenant: engineering firm ESD, which is leasing 46,884 square feet in the landmark skyscraper.
ESD will occupy the building's entire 53rd floor and half of the 54th floor, according to Equity Office, a unit of Blackstone Group, which bought the 110-story property in 2015 for $1.3 billion. ESD, which specializes in the construction sector, will move its 250 employees there next June from a building a couple of blocks away, at 175 W. Jackson Blvd.
Equity Office has made its redevelopment of Willis Tower a centerpiece of its marketing efforts with prospective tenants. Unveiled in February, the plan includes a new fitness center, tenant lounges, an outdoor deck, and an expansion of the building's retail space and its Skydeck observatory.
"The story that we're selling is one that's really resonating" with tenants, said David Moore, senior vice president of Chicago-based Equity Office. "It's been a flurry of activity."
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Equity Office has additional leases in the works with prospective office tenants totaling about 150,000 square feet, he said; he declined to identify them. The ESD lease raises the occupancy rate in the 3.9 million-square-foot building to 87 percent.
New tenants in the tower at 233 S. Wacker Drive, the city's tallest, include the National Restaurant Association, which signed a 51,000-square-foot lease in February and plans to move there in December. Law firm Schiff Hardin, a tenant in the building since it opened in 1973, also recently extended its lease there while shrinking to 181,000 square feet from 209,400 square feet.
Equity Office also recently landed the first tenant for the building's expanded retail space: Convene, a New York-based company that provides meeting and event space for corporate functions, which signed a lease for 55,000 square feet on the tower's third floor.
ESD is expanding in the move from 175 W. Jackson, its home since 2001, where it currently occupies about 42,100 square feet, according to real estate information provider CoStar Group. Coincidentally, the National Restaurant Association is also moving from 175 W. Jackson, a 1.5 million-square-foot building.
"We are excited to be playing a role in the transformation of this iconic building and look forward to moving there," Raj Gupta, ESD's executive chairman, said in a statement. Efforts to reach Gupta for more information were unsuccessful.
Brokers for Telos Group, a Chicago-based brokerage, represented Equity Office in the lease, while brokers at CBRE and Jones Lang LaSalle represented ESD.
Willis Tower reported net operating income of $82.1 million last year, up 16 percent from 2015, according to a prospectus connected to a $1.02 billion mortgage on the property. The building's largest tenants include the parent company of United Airlines, Schiff Hardin, law firm Seyfarth Shaw and Willis Towers Watson, an insurance brokerage and consulting firm that bought the naming rights to the landmark formerly known as Sears Tower in 2009.