Willis Tower unveils $500m redevelopment vision
February 1, 2017
By Ryan Ori
CRAIN'S CHICAGO BUSINESS
Willis Tower owner Blackstone Group today outlined its towering vision for a $500 million redevelopment of the city's tallest building, which it said will be its largest capital investment ever in a property.
In a broad-strokes presentation to media, real estate execs and city officials today, the New York-based private-equity giant described a project it believes will transform the area around the 110-story office tower into a bustling destination for food, drink, shopping and entertainment.
"The Willis Tower has been under-managed and under-invested in for a number of years, and that changes today," said Jon Gray, Blackstone's global head of real estate.
Blackstone has been planning the ambitious project, which would include the construction of a 300,000-square-foot extension of the building's base, since buying the former Sears Tower for $1.3 billion in 2015.
The project, to be completed by summer 2019, will be "a retail and entertainment destination that was missing in the West Loop and will be unmatched by any other destination in Chicago," said Paul Kurzawa, who is overseeing the redevelopment.
Kurzawa, a managing director at Blackstone's Chicago-based Equity Office unit, is a real estate veteran who previously oversaw the creation of international entertainment venues for DreamWorks Animation.
Kurzawa said the firm is already in lease negotiations for more than half of the 300,000 square feet of new retail space it plans to add on to the building. The new three-story glass structure will be topped by a 30,000-square-foot outdoor deck, where it could have ice skating in the winter, and includes two below-ground levels.
New retail will range from five-star restaurants to fast-casual food, along with a fresh-food market, Kurzawa said.
Additionally, the landlord is "in the final stages of negotiations with one of the largest media and entertainment companies in the world to open a first-of-its kind 50,000-square-foot digitally interactive and immersive family entertainment experience," he said.
The 103rd-floor Skydeck Chicago, which draws 1.7 million visitors per year, may be expanded into the 102nd floor. New offerings will include "an enhanced thrill ride experience that will give visitors a brand-new perspective of what it's like to be 1,353 feet in the air looking straight down," Kurzawa said.
Gray said Blackstone's ambitious Willis Tower plan reflects its confidence in Chicago and other large cities.
"We're big believers in Chicago," said Gray, a Highland Park native. "There is a downtown renaissance underway as companies continue to relocate from the suburbs and beyond."
Equity Office and other Blackstone units plan to move to about 50,000 square feet in Willis Tower within the next year, Equity Office President and CEO Eli Khouri said. Equity Office's current headquarters is at 222 S. Riverside Plaza in the West Loop.