March 12th, 2009
Sears Tower to be Renamed for New Tenant
Crain's Chicago Business
Sears Tower will become Willis Tower.
The insurance broker announced Thursday morning that it will move to the Sears Tower and that the building will be renamed Willis Tower.
London-based Willis Group Holdings said it will consolidate five local offices into more than 140,000 square feet in the 110-story building at 233 S. Wacker Drive. Almost 500 employees will move into the building, Willis said.
Willis said the space is costing the company $14.50 a square foot and that it is not paying extra for the naming rights.
Three years ago, when Sears Tower’s ownership group was looking to refinance the building, a representative compared the value of the naming rights to the building and its observation deck to stadium naming-rights deal, citing examples ranging with fees from $5.8 million to $10 million a year.
Willis is the largest new tenant to move into Sears Tower since the 2001 terrorist attacks. In recent years, the building has suffered several big tenant losses, including its largest tenant, by rental revenue, Ernst & Young U.S. LLP, which is moving in 2012 to an almost-complete skyscraper at 155 N. Wacker Drive.
“Having our name associated with Chicago’s most iconic structure underscores our commitment to this great city, and recognizes Chicago’s importance as a major financial hub and international business center,” Joseph J. Plumeri, chairman and CEO of Willis Group Holdings, said in a release. “We are delighted to be making this bold move and firmly establishing our leading presence in one of the nation’s biggest insurance markets, and it will be wonderful for all our associates to work under one roof.”
Willis currently has about 91,000 square feet in three downtown locations, according to real estate research firm CoStar Group Inc. The largest amount is about 42,000 square feet at 10 S. LaSalle St.
Offices in west suburban Oak Brook and Lombard also will be consolidated into the Sears Tower, Willis said. Willis expects to complete the move by late summer.
Willis is the world’s third-largest insurance brokerage, with brokerage revenue of $2.46 billion in 2007, according to Crain’s sister publication Business Insurance. Chicago-based Aon Corp. ranked second on BI’s 2008 list, with 2007 brokerage revenue of about $7.1 billion; Hilb ranked eighth, with brokerage revenue of about $780 million.
Willis renamed its North American business Willis HRH after its acquisition of Hilb for $2.1 billion, including assumed debt. The transaction increased Willis’s presence in the U.S. market but also increased its debt load at a time when insurance prices are softening, analysts say.