US Equities Starts as New Manager of Sears Tower

CHICAGO-US Equities Realty, headquartered here, begins this week as the new leasing and property manager for the Sears Tower, 233 S. Wacker Dr. US Equities is taking over the reins from CB Richard Ellis. The financial terms of the agreement were not disclosed. The 110-story tower includes office and retail space, a health club, conference facilities, a restaurant, parking space and antenna and broadcasting facilities. The tower also has the famous Skydeck observatory, on the 103rd floor of the building, which attracts more than one million visitors each year.

US Equities officially took over April 1 for the Sears Tower, owned by 233 S. Wacker LLC, which includes American Landmark Properties, the Chetrit Group and the Moinian Group. US Equities chairman and chief executive officer Robert Wislow, vice chairman Camille Julmy and managing director and executive vice president Katherine Scott will be in charge of the leasing and managing decisions for the 3.8 million-sf tower. Senior vice president Jeffrey Barron will “oversee the leasing team’s day-to-day initiatives,” according to a released statement.

Tower management chose US Equities for the new leasing and property manager, in part, because of its experience as the leasing and management agent for the John Hancock Center, 875 N. Michigan Ave., says John Huston, executive vice president of Skokie-based American Landmark Properties. “We wanted a firm that was very good with multi-use properties and US Equities possesses that unique experience necessary to enhance multi-use properties like the Sears Tower and they are also the right fit for the ownership group,” Huston says.

While managing the John Hancock Center, the occupancy rate was increased from 47% to 93% and retail occupancy was increased from 40% to fully occupied. US Equities also manages 20 N. Clark, 55 W. Monroe, 120 S. LaSalle and the Woodfield Corporate Center, Wislow says. “We have pretty much made our mark here by getting major properties like these leased up,” he says.

As part of its management duties, US Equities will oversee the renovation of the Skydeck observatory. Renovations are expected to be complete before the tourist season begins in 2009, Huston says. The firm also plans on focusing on leasing up the tower, Wislow says.

The Sears Tower currently has an 82% occupancy rate, Huston says. Major tenants in the building include Ernst & Young, Chubb, law firm Sonnenschein Nath & Rosenthal LLP, law firm Schiff Hardin & Waite, Bank of America and law firm Latham Watkins. Citigroup, private-equity firm GTCR Golder Rauner LLC, and consulting firm Bain & Co. have announced their intentions to leave the Sears Tower but their leases will not be up for two to three years so it does not affect the current occupancy rate, Huston says. In January, GlobeSt.com reported that the lease rate of the Sears Tower was in the mid-teens net. Huston says the lease rate is “substantially higher” but said he could not give the exact figure. Asking rent for class A office buildings in the West Loop submarket is about $33.91 per sf, gross, according to a Grubb & Ellis fourth quarter market report.