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MetLife to Sell Sears Tower (reuters)
NEW YORK - Insurance giant MetLife Inc. said Thursday it has agreed to sell the Sears Tower in Chicago to an unspecified buyer, ending the company's long-standing investment in the nation's tallest skyscraper.
MetLife, which is based in New York, expects to close the deal in the second quarter and take a $90 million gain. The company said the sale won't have a material impact on operating earnings.
MetLife spokesman John Calagna said the company entered into a confidentiality agreement with the buyer and won't disclose the price or the name of the acquiring company.
"This is a very good deal for company," Calagna said. "We're always looking at our real estate portfolio; it's a very favorable marketplace right now and we took that into account, so it was the right decision to sell this building at this time."
Sears Tower is a 110-story landmark in downtown Chicago.
MetLife's sale closes the books on the company's ownership, which dates back nearly 15 years.
It also marks a quick turnaround since the company acquired full control in August.
In 1990, MetLife purchased a mortgage on the property after the original owner, Sears Roebuck & Co., refinanced amid a severe real-estate downturn. Trizec Properties Inc., a real-estate investment trust based in Chicago, bought control of the tower in 1997 through a $70 million second mortgage purchased from another lender. Legal title was to pass to Trizec this past January.
But Trizec's equity position effectively dissolved over the past few years as the building's value deflated amid a weak office market in Chicago. Trizec instead sold its stake in August for $9 million to MetLife, which held the $766 million first mortgage. Trizec continues to manage the property.
The Sears Tower, which is 88 percent occupied, has struggled with sagging demand for office space and tenants' lack of enthusiasm for high-profile buildings after the terror attacks of 2001.
Shares of MetLife closed Thursday were at $33.47, down 80 cents, or 2.3 percent, on the New York Stock Exchange.
NEW YORK - Insurance giant MetLife Inc. said Thursday it has agreed to sell the Sears Tower in Chicago to an unspecified buyer, ending the company's long-standing investment in the nation's tallest skyscraper.
MetLife, which is based in New York, expects to close the deal in the second quarter and take a $90 million gain. The company said the sale won't have a material impact on operating earnings.
MetLife spokesman John Calagna said the company entered into a confidentiality agreement with the buyer and won't disclose the price or the name of the acquiring company.
"This is a very good deal for company," Calagna said. "We're always looking at our real estate portfolio; it's a very favorable marketplace right now and we took that into account, so it was the right decision to sell this building at this time."
Sears Tower is a 110-story landmark in downtown Chicago.
MetLife's sale closes the books on the company's ownership, which dates back nearly 15 years.
It also marks a quick turnaround since the company acquired full control in August.
In 1990, MetLife purchased a mortgage on the property after the original owner, Sears Roebuck & Co., refinanced amid a severe real-estate downturn. Trizec Properties Inc., a real-estate investment trust based in Chicago, bought control of the tower in 1997 through a $70 million second mortgage purchased from another lender. Legal title was to pass to Trizec this past January.
But Trizec's equity position effectively dissolved over the past few years as the building's value deflated amid a weak office market in Chicago. Trizec instead sold its stake in August for $9 million to MetLife, which held the $766 million first mortgage. Trizec continues to manage the property.
The Sears Tower, which is 88 percent occupied, has struggled with sagging demand for office space and tenants' lack of enthusiasm for high-profile buildings after the terror attacks of 2001.
Shares of MetLife closed Thursday were at $33.47, down 80 cents, or 2.3 percent, on the New York Stock Exchange.