Chicago's Willis Tower to get $500 million makeover

One of the nation’s most iconic skyscrapers is getting a $500 million makeover.

The private equity firm Blackstone Group announced on Wednesday that it will soon begin a mammoth renovation of its Willis Tower, the nation’s second-tallest building.

The modernization project of the building (still referred to by its original name of Sears Tower by most Chicagoans) calls for more than 300,000 square feet of new retail, dining and entertainment space to be added to the base of the building and an upgrade of the observatory deck.

The office building, which was purchased in 2015 by Blackstone for $1.3 billion, is perhaps the best-known building in Chicago’s famed skyline. Blackstone’s purchase of the 43-year-old skyscraper set a record price for a U.S. office building not in New York.

But the owners said the tower—which has relatively little retail space and a rather drab, fortress-like aesthetic—was in need of an update to make it more inviting to the public and attract tenants, who are increasingly looking to create more inviting workplaces for their employees. The tower was the world's largest when it opened in 1973 and had bragging rights until 1996, when Petronas Tower was opened in Kuala Lumpur. It was surpassed as the tallest building in the U.S. in 2014 with the opening of One World Trade Center in New York.

“No longer will this be an inaccessible fortress with limited amenities, which feels a bit desolate after 5 p.m.,” said Jon Gray, global head of real estate for Blackstone. “The goal is to create a welcoming and exciting place for office tenants, area residents and visitors.”

Photos: Chicago's iconic Willis Tower

The currently underutilized plaza space will be replaced by a three-story retail structure that will wrap around the base of 110-story tower. The new structure will feature a 30,000-square rooftop garden space that will be accessible to the public.

Paul Kurzawa, managing director of development for the building management arm of Blackstone, Equity Office, said that about 50% of the new retail space that will be built is already under lease negotiation.

The tower’s 103rd-story observation sky deck, which draws about 1.7 million visitors annually, will also be updated, according to Blackstone officials. Kurzawa said that the tower’s operators are looking to build on the success they’ve had with “The Ledge”—the all-glass boxes that jut out from the observatory deck and allow visitors to look more than 1,300-feet to the street below.

Blackstone buying Chicago's Willis Tower

Blackstone and Equity Office are in the “final stages of negotiations with one the largest media and entertainment organizations in world” to open 50,000 square-foot family entertainment experience, Kurzawa said.

Construction is set to begin later this month, and is expected to be completed by the summer of 2019.