“Properties nearby don’t have comparable amenities, but they are going to be less expensive.” “This isn’t a building you’re going to get into and find a discounted, post-pandemic rent,” Rogoway said. That could lead to higher costs for new tenants. “I also think they’ve done a fabulous job with the new retail, so we talk about Willis with every prospect we work with that’s a fit for the West Loop.”īut the $500 million price tag also means Blackstone has a big investment to recoup. “This quadrant of the Loop is going to be a much more vibrant part of downtown,” said Allen Rogoway, managing principal at Cresa Chicago. And Kastle Systems, a security firm that tracks office entries, estimated most workers remain at home, with actual office use in the Chicago metro area now standing at just 39%, up from 37.8% four weeks ago.īrokers helping companies find new office space say Willis Tower’s makeover gives it some advantage over the competition. Firms have shed millions of square feet in leased space since 2020, and the market’s vacancy rate just hit a record high of 19.7%, according to a new report from Colliers International. Leasing empty offices is not easy these days. Its most notable vacancy appeared when United Airlines, the building’s largest tenant, announced early last year it would give up three of its 17 floors after posting more than $7 billion in losses for 2020. Those buildings also promise all the perks and were landing new tenants even during the darkest days of the pandemic.īlackstone hopes to copy that success at Willis Tower, currently about 85% leased. Willis Tower now belongs to an elite class, she added, equal to gleaming new projects along the Chicago River such as the Salesforce Tower and others to the west in Fulton Market, the city’s hottest office market. “There was almost no part of the building that was untouched,” said Kathleen McCarthy, global co-head of Blackstone Real Estate. Elevators were also modernized, and HVAC systems replaced, winning accolades from the U.S. Tenants now enter through refurbished lobbies decorated with art and can quickly reach whole floors dedicated to amenities such as fitness centers, bars, cafes, conference spaces, lounges and a private club. “We have to keep making sure we’re surprising or delighting our customers on a daily basis.”Ī five-level retail, restaurant and entertainment hub called Catalog replaced a mostly empty plaza along Jackson Boulevard and includes a rooftop terrace where office workers type on their laptops next to sunseekers enjoying the weather. “The biggest competition we have right now for office space is home,” Moore said. But Moore said prospective tenants are already visiting Willis Tower and may soon fill its empty space. Office activity across Chicagoland remains stubbornly low, and companies could hold off pulling the trigger on new leases. Another COVID variant just popped up in Illinois, raising infection rates and keeping the downtown market off balance. Employees who enjoyed the comforts of home for several years will not happily return to sterile environments but might refill downtown streets if office landlords create community hubs packed with restaurants, shopping, events and public spaces. The more than $500 million project was planned long before anyone heard of COVID-19, yet still shows how downtowns can recover from the pandemic, added Moore. “It was an engineering marvel, but it was monolithic, with granite everywhere, so it left a lot to be desired,” said David Moore, senior vice president of EQ Office, a firm wholly owned by Blackstone.īut company officials say a five-year makeover is complete, and a ceremonial ribbon-cutting on Tuesday will celebrate the transformation of the 110-story building, once the world’s tallest, into what they call a group of neighborhoods, open to workers, nearby residents and the many tourists flocking to its famous observation deck. Willis Tower still dominates Chicago’s skyline 49 years after its construction, but when Blackstone bought it for $1.3 billion in 2015, the iconic structure inspired more awe than affection. Willis Tower owners wrap up $500 million makeover that includes new retail hub, enhanced amenities
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