Blackstone Group Refinances Willis Tower Debt, As Redevelopment Costs Climb

A rendering of Blackstone Group's planned renovations for Willis Tower, viewed from the corner of Jackson Boulevard and Wacker Drive
Courtesy of Blackstone Group/Equity Office
A Rendering Of Blackstone Group's Planned Renovations For Willis Tower, Viewed From The Corner Of Jackson Boulevard And Wacker Drive

Blackstone Group refinanced its debt on Willis Tower for the second time in a year. A venture of Deutsche Bank and Barclays agreed to lend Blackstone $1.325B against Chicago's tallest building, according to Cook County records.

This loan replaces a $1.02B refinancing package from February 2017. Blackstone used the new loan to pay off the original refinancing package, while adding another $305M in debt to its load as Willis Tower's five-year renovation plan enters its second year.

A Blackstone rep said the firm decided to refinance again to take advantage of favorable market conditions, as well as capitalize on the momentum generated by Equity Office's leasing efforts at Willis. The higher value of the new loan suggests the strategy is working: Willis Tower's occupancy rate now stands at 90%, compared to 77% a year ago.

Blackstone did not release what it will do with the money, but it does come as cost projections for the renovations rose to $688M. The new debt will be repackaged as a CMBS offering.

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