Chicago’s Willis Tower Owners Said to Seek Buyer or Investor for Building

The owners of Chicago’s Willis Tower are seeking to sell North America’s tallest building or a stake in the skyscraper as prices for landmark office properties rebound, according to two people familiar with the plans.

The owners have hired brokers to market the 110-story tower in Chicago’s West Loop, said the people, who asked not to be identified because they aren’t authorized to speak about the situation. The building is owned by a partnership that includes New York investors Joseph Moinian and Joseph Chetrit and American Landmark Properties Ltd. of Skokie, Illinois. In 2004, the group paid $841 million for the property, then known as the Sears Tower, according to Real Capital Analytics Inc.

“This is a great sign of how liquidity is returning to the marketplace, that this ownership group thinks the market can digest an asset of this size,” said Dan Fasulo, managing director of Real Capital, a property-research firm based in New York. “Usually you see an asset of this size come to market at the end of a cycle, not the beginning.”

Prices for so-called trophy office buildings in six U.S. cities -- New York, Washington, Los Angeles, San Francisco, Boston and Chicago -- were up 23 percent in March from their July 2009 low, Moody’s Investors Service reported May 23. The increase occurred even as overall U.S. commercial property values show “no sign of recovery,” Moody’s said.

Newmark and Eastdil

James Kuhn of Newmark Knight Frank LLP and Doug Harmon of Eastdil Secured are representing the owners of Willis Tower, the people said. Harmon brokered the sale of 111 Eighth Ave. in Manhattan to Google Inc. (GOOG) for $1.8 billion, the largest U.S. building transaction in 2010.

Mira Matic, a Newmark spokeswoman, said Kuhn couldn’t be reached for comment. Telephone calls to Chetrit, Moinian and Martha Wallau, an Eastdil Secured spokeswoman, weren’t returned.

The plans were reported yesterday by Reuters.

The 3.8 million-square-foot (353,000-square-meter) Willis Tower, completed in 1973, is about 80 percent occupied, said one of the people familiar with the owners’ plans.

The building became the Willis Tower in 2009 when London- based Willis Group Holdings Inc., the third-biggest insurance broker, agreed to rent space there. Goldman Sachs Group Inc. (GS) vacated about 243,000 square feet there this year, and Ernst & Young LLP’s lease of 352,000 square feet expires next year, according to data compiled by Bloomberg.

United Airlines, a United Continental Holdings Inc. (UAL) unit, last year said it would take 12 floors at the tower. The building has $780 million of securitized senior debt, according to Bloomberg data.

To contact the reporter on this story: David M. Levitt in New York at dlevitt@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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