Willis Tower owner seeks thousands of new visitors per day, as $500 million expansion takes shape
September 13, 2018
By: Ryan Ori
Chicago’s tallest skyscraper also could be known for its sprawling base by late 2019, when Willis Tower’s owner completes a 300,000-square-foot expansion designed to lure thousands of additional visitors each day.
About 200 trades workers are on the job six days a week to complete an unusual five-level addition starting inside the south edge of the 110-story tower, which has been cut away, as part of owner Blackstone Group’s $500 million expansion.
New York-based Blackstone is adding a food hall, meeting and events space, restaurants, entertainment, a rooftop park and a soaring skylight — offering straight-up views of the south side of Willis Tower — that will be supported by specially made, 75,000-pound beams.
The overhaul also will replace the fortresslike exterior with tall windows, improved entrances and open gathering areas.
The new space will be called Catalog, a reference to the 1,451-foot-tall skyscraper’s initial namesake tenant, Sears, Roebuck & Co., and to Chicago’s history as home to other mail-order retail giants such as Montgomery Ward.
Catalog is designed to serve the tower’s massive workforce and the more than 1.7 million annual visitors to the Skydeck tourist attraction.
“We’re a city within a city, with 15,000 workers here each day, and that number is only increasing with new leasing,” said David Moore, senior vice president and portfolio director at Chicago-based EQ Office, Blackstone’s office unit. “Our approach to this entire project is all about making it feel like a neighborhood.”
Private-equity giant Blackstone has lease commitments for about half of the new retail and entertainment space. It also wants to sign tenants that will provide fitness classes, full-service dining, cocktails, services and entertainment.
In the most recent deal, London-based food hall operator Urbanspace will take more than 14,000 square feet. The food hall could include 20 or more stations for local vendors and chefs, as well as potentially include food concepts from London and New York, Urbanspace President Eldon Scott said.
Urbanspace will rotate some vendors, including some it will find in Chicago neighborhoods as part of its Urbanspace Challenge program, Scott said. “We love the density of Chicago and the history of the neighborhoods,” he said. “It’s right up our alley.”
Urbanspace has food halls in New York, and plans U.S. expansion into Los Angeles, Chicago and other cities. The company was founded in 1972 in London, long before the proliferation of food halls.
The new retail base will have two levels below street level and three above. In the largest deal for that portion of the building, the Tribune reported last year that New York-based corporate meeting and event space provider Convene has leased 55,000 square feet.
Other retail tenants will include Shake Shack, Sweetgreen, Luke’s Lobster, Starbucks and Taylor Gourmet. Longtime tenant Market Creations, which has closed down during the expansion project, will return in the new space, Moore said.
EQ Office is represented by CBRE retail brokers Todd Siegel, Phil Golding and Kim Wiskup.
Added tourist attractions will later be unveiled for Skydeck, which potentially could be expanded, Moore said.
New entrances to the building will open in 2019 and 2020. “When we open up all these entrances and all this transparency and vibrancy at street level, the face of this whole space is going to change,” Moore said.
Combined with other major projects in the area, including the proposed redevelopment of Union Station and work already underway at the long-vacant old main post office, the area may lose its reputation as an office-hours-only spot.
“This part of the city has always been kind of an 8-to-5 destination,” said Gensler architect Todd Heiser, designer of the Catalog project. “Now people can linger here, and there can be a vibrant night culture.”
Terra cotta elements will be included in the interior and exterior of the new base, Heiser said. Wood from long-submerged logs recovered from Lake Michigan will be used in portions of the interior, helping to soften the tower’s brawny, black-metal look, he said.
The skyscraper at 233 S. Wacker Drive was completed in 1974. Blackstone bought it for a Chicago-record $1.3 billion in 2015.
The addition will increase Willis Tower’s total size to about 4.5 million square feet, including about 3.5 million square feet of rentable office space and 300,000 square feet of retail.
Improvements to other portions of the building include a new fitness center, lounges and a $75 million modernization of the elevators.
Willis Tower’s office space is about 95 percent leased, compared with about 80 percent when Blackstone bought the building, Moore said.
Major investments in the building’s infrastructure and amenities, new retail and rising rents are boosting the value of a property that shattered Chicago’s sale-price record in 2015. It was the highest price ever paid for a U.S. office building not in New York.
When Blackstone completes the revamp and looks to cash out, perhaps within a couple of years, the deal will test the limits of what any investor will pay for a noncoastal U.S. property.
“This will be the biggest building sale ever in Chicago, probably for quite some time,” Moore said. “We’re taking a building that was a laggard and creating a Class A leader in the market, in arguably one of the most unique buildings in the country. This is a special opportunity and it will be a unique buyer. But we have a long way to go before that.
“When the time comes, we’ll test the market for sure.”