8/2/2019 HFAIRSears Tower to Change Hands Sun Times

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Sears Tower to Change Hands

Chicago Sun-Times - Tuesday, November 8, 1994Author:Mary Ellen PodmolikIt may still be called Sears Tower, but Sears, Roebuck and Co. Monday sold the 110-storystructure that dominates Chicago's skyline in an $850 million deal.

The retailing and insurance company announced plans Monday to transfer ownership of theRetailer plans to test `gainsharing'; Page 55.

21-year-old building to a trust. In 2003, AEW Partners L.P. will take possession of SearsTower. The Boston-based group of pension plans, managed by Aldrich, Eastman & Waltch,brokered the 1989 mortgaging of the tower, and held $250 million of the mortgage and apurchase option on the property.

The building's name will remain Sears Tower, and Sears will keep its corporate offices therethrough 2000. If Sears exits the building before then, or when its lease expires, the building

could be renamed, said Sears Vice Chairman James Denny.

Denny noted the emotional tie of the building to the company, but said: "In 1989, we sold theoption to AEW. We really addressed the emotional issue at that time."

Currently, Sears' operations account for only 200,000 square feet of the 3.6 million square feetof office space there. In its heyday, after the Merchandising Group consolidated its officesthroughout Chicago into the tower, more than half of its floors were filled with 8,000 Searsworkers.

"As soon as (Sears Chairman) Gordon Metcalf's great Tower began to climb skyward, the

lower profile began to disappear," author Donald Katz wrote in The Big Store, a history ofSears. "From the precise moment Metcalf decreed that the largest merchandising system inthe world should be architecturally represented, the company, by degrees, began to receivethe sort of scrutiny and legal writs drawn by other big businesses."

The sale of the tower follows more than a year of efforts by Sears to refinance the structure.The tower originally was put up for sale in 1988, during the company's wide-ranging financialoverhaul.

Thirteen months later, Sears took the tower off the market and mortgaged it in a deal thatadded $815 million to Sears' balance sheet.

However, the tower's fortunes began to sag, particularly as other office buildings sprang up inthe Loop and the Merchandise Group relocated to Hoffman Estates in 1992.

In the past two years, Sears has poured significant sums into the building, remodeling its lobbyand elevator system, and adding a separate entrance for tourists wanting to see Chicago fromthe skydeck at the world's tallest building.