Just a year after Blackstone Group took out a record $1 billion refinancing for the Willis Tower, the firm has taken out an even bigger mortgage on the skyscraper.
Property records show Blackstone took out a new loan from Deutsche Bank and Barclays for over $1.3 billion to refinance the 110-story, 4.6 million-square-foot property. Blackstone bought the building for $1.3 billion in 2015, from a partnership between Joseph Chetrit, Joseph Moinian and American Landmark Properties. The deal was at the time the largest for a single building outside New York.
Blackstone embarked on an overhaul of the tower that is now, according to Crain’s, expected to cost $668 million, about $100 million more than an estimate the firm made last year. The renovation will include build-outs of new retail space, a fitness center, tenant lounges, updated elevators and an updated 103rd floor observation deck.
Office leasing at the building has picked up. A year ago, occupancy ticked in at 77 percent. New deals, Morgan Stanley’s recent 122,000-square-foot lease, have brought the building’s vacancy down to about 10 percent. New retail tenants, including Shake Shack, have helped boost the property’s income.
The new loan replaces the one from last year, which Blackstone paid off. A spokesperson for Blackstone told Crain’s the company decided to refinance to avail of a better debt market and bring down the cost of debt on the loan, as well as to seize the momentum it generated from the new leases. [Crain’s] —Scott Klocksin