Two of the most coveted assignments in Chicago real estate are up for grabs. The owners of Sears Tower said Tuesday they are parting ways with the firm responsible for its leasing and management.
CB Richard Ellis Group Inc. has handled those tasks for the nation’s tallest building since 2004. The owners said the agreement with CB expires at the end of 2006, but that the firm will stay on until a replacement is found.
The owners and CB described the parting as mutually decided and amicable. But it comes as the 110-story tower has suffered financial setbacks. Industry data show that about 21 percent of the tower is vacant, double the reported figure in early 2004.
In addition, the owners made a financially disastrous move earlier this year when they stopped Levy Restaurants Inc. from operating four locations inside the tower, 233 S. Wacker. They filed a lawsuit against their new restaurant operator, Sodexho USA, charging that they ran up $1.1 million in losses in just seven months. The restaurants are closed.
One of the Sears owners, John Huston, principal of Skokie-based American Landmark Properties Ltd., could not be reached. In a press release, Huston praised CB’s tenure.
"Together, we’ve increased Skydeck revenues, developed a robust office leasing program, reduced expenses and enhanced security," he said. CB is the largest real estate firm in Chicago.
Other owners include New York investors Joseph Chetrit and Joseph Moinian. Their 2004 acquisition valued the building at $840 million, and they are negotiating a refinancing with several funding sources.
Without discussing vacancy rates, the Sears owners said 250,000 square feet of new leases have been signed for the building in the last two years. The building contains about 3.8 million square feet.
Some leasing experts have said the owners need to cut rents more to woo tenants to a tower that acquired a stigma after the Sept. 11, 2001 terrorist attacks.
0 Responses to “Sears Tower owners, management firm split”