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The Taller They Are....

Economic upheavals often end up shuffling around a lot of names. One stadium sponsor slips beneath the dark, frigid waves, another brands its logo on the same spot without a second thought. One endorsement drops off, another endorsement steps up (but for a lot less dough). The tallest building in North America starts to see a lull in lease renewals and... it changes its name from "The Sears Tower" to "The Willis Tower."
This shouldn't be surprising, really. Sears moved their headquarters from the building in the 1990s. The terms of this most recent change, however, are surprising.
The Sears Tower has just shy of four million square feet available for tenants. How much of this is UK insurer Willis Group Holdings leasing to capture naming rights for the massive structure? About 3.5%. If it occurred to you that this might tell us quite a lot about who was in control of the negotiations, you aren't alone.
"233 S. Wacker Drive LLC," a group including, among others, Joseph Chetrit and American Landmark Properties, bought the 110 story building in 2004 for just under $850 million. It was then refinanced for about $780 million in 2007, when things were, shall we say, a bit more optimistic. The picture starts to fill out when you realize that Ernst & Young, a long-time Sears Tower tenant, reportedly declined to avail themselves of their 2012 option to renew their lease. At 380,000 square feet, their aversion to offices in the tallest building on the horizon comes as something of a blow. Naming rights? Sure thing! How soon can you move in?
Of course, we tried to reach Eddie ("ESL") Lampert to ask him why Sears would permit themselves to lose title to the highest restrooms above street level in the world (they are on the 103rd floor), but no one would return our calls.


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