Earlier this year, Blackstone announced its iconic Willis Tower–the tallest building in Chicago and second-tallest in the U.S.–was gearing up for the first major renovation in its 43-year history. So we thought we’d head (Mid)west towards the Chicago commercial real estate market, birthplace of the modern skyscraper, to see which and what kinds of buildings paid the highest property taxes here in 2016, and how the former Sears Tower stacks up. As it turns out, Willis Tower, which actually pays the highest taxes for an office building outside New York City, landed the top spot, shelling out more than $28 million on taxes last year. The building’s 2016 tax numbers are 7.09% higher than what they were in 2015, when current owner Blackstone bought it for a record $1.3 billion. It’s easy to see just how valuable the property is–the other contenders on our list pay significantly lower taxes than Willis Tower, with none of them reaching the $20 million mark.
Mapping Out the Top Taxpaying Buildings in Chicago
To get a clearer picture of where Chicago’s top taxpaying buildings lie, we drew a map pinpointing the location of all the buildings featured on our top 10 list. One can see at first glance that most of these properties are located in The Loop (Chicago’s central business district), the exception being Water Tower Place, which is located along the upscale Magnificent Mile. The area is home to several of the tallest and most iconic buildings in the U.S., such as the John Hancock Center, the Trump International Hotel and Tower, the Wrigley Building and the Tribune Tower. Nonetheless, Water Tower Place was the only Mag Mile property to land in our top 10 taxpaying buildings in Chicago.
#1. Willis Tower – $28,453,830 in property taxes in 2016
The 108-story, 1,450-foot skyscraper formerly known as the Sears Tower is the tallest and most recognizable building on the Chicago skyline. The dark steel-and-glass tower held the title of world’s tallest building from its completion in 1973 until the topping out of the Petronas Twin Towers in Kuala Lumpur, Malaysia, in 1998. Nonetheless, the Willis Tower maintains its dominating position as the second-tallest building in the U.S. (surpassed only by One World Trade Center in New York City) and the entire Western Hemisphere. In 2015, Blackstone paid a record $1.3 billion to acquire the iconic Chicago tower, with plans to invest another $500 million into major renovation efforts. It’s no wonder the Wacker Drive property boasts the highest commercial property taxes in the city–Willis Tower seems to break new sales records each time it changes hands, which leads to an increase in market valuation. In 2016, the 3.8 million-square-foot building was valued at nearly $580 million, and was shelling out $28.4 million on property taxes–7% more in taxes compared to 2015.
Nonetheless, if you think $28 million is an excessively high number, when compared to the top 100 taxpaying buildings nationwide, Willis Tower doesn’t even make the top 20. Instead, all the top positions are occupied by properties in Manhattan, a veritable Mecca for real estate investment. The General Motors Building actually commands 152% more in property taxes than Blackstone’s Wacker Drive gem, pointing out the huge gap between New York City and the rest of the U.S.
#2. 300 East Randolph Street – $19,074,574 in property taxes in 2016
The Blue Cross Blue Shield Tower located in Chicago’s Millennium Park, right next to the Aon Center, was designed by Goettsch Partners and completed in 1997, featuring 33 stories. The second phase of the build-out at 300 E. Randolph St. added 24 more stories and was finalized in 2010. The 57-story tower is home to the headquarters of the Health Care Service Corp. and houses predominantly government tenants. City records data show that property taxes for the Blue Cross Blue Shield Tower rose 16% from 2015 to 2016, totaling $19 million last year. The building boasts a market value of $358 million.
#3. Water Tower Place – $16,451,972 in property taxes in 2016
Named after the nearby historic Chicago Water Tower at 835 N. Michigan Ave., Water Tower Place is a one-of-a-kind silhouette on the Windy City skyline. Upon completion in 1975, the mixed-use development forever altered the dynamic of the Magnificent Mile by bringing more affordable retailers to a destination that was dominated by luxury shops and expensive hotels. The development incorporates a 758,000-square-foot, Abercrombie & Fitch-anchored shopping mall, as well as a 74-story condo and hotel tower. Residents at Water Tower Place include Oprah Winfrey, who reportedly paid $6 million for a luxury condo apartment in 2006. The hotel portion of the development consists of the 435-key, five-star, award-winning Ritz Carlton, Chicago, which occupies floors 15 to 30. Water Tower Place owner General Growth Properties paid 11% more taxes in 2016 for the property valued at $323 million. Per our estimates, Water Tower Place paid $16.4 million in property taxes in 2016.
#4. Aon Center – $16,424,059 in property taxes in 2016
Formerly known as the Standard Oil Building, the 83-story office tower at 200 E. Randolph St. was completed in 1974 and is currently the third-tallest building in the city. The Aon Center is home to JLL’s headquarters, as well as Aon’s U.S. operations, and has earned LEED Silver certification from the USGBC. In the fall of 2015, 601W Cos. paid $712 million to acquire the property from Piedmont Office Realty Trust. The Aon Center boasts a market value of $377 million and shelled out $16.4 on property taxes in 2016, according to our estimates.
#5. 300 North LaSalle Street – $14,493,992 in property taxes in 2016
The 60-story mixed-use tower located at 300 N. LaSalle St. in Near North Side Chicago was completed by Hines in 2009. The shiny glass-clad building prides itself on having earned the highest-possible rating under the USGBC’s LEED for Existing Buildings (EB) category–LEED Platinum certification. Designed by Pickard Chilton, the 1.3 million-square-foot office tower includes a three-level, 225-car parking garage, fitness and conference centers, as well as 200 feet of frontage along the north bank of the Chicago River. 300 N. LaSalle last changed hands in 2014, when it was acquired by Irvine Co. for a price tag of $850 million. The property has a market value of $294 million and shelled out $14.4 million on property taxes in 2016–8% more than what it paid the previous year.
#6. The Franklin – $13,978,500 in property taxes in 2016
Completed in 1989 as the AT&T Corporate Center, the 60-story building at 227 W. Monroe St. is the tallest constructed in Chicago during the last quarter of the 20th century. Located northeast of the Willis Tower in the Loop, The Franklin was designed by Adrian Smith of Skidmore, Owings & Merrill in a style reminiscent of the Chicago Board of Trade Building, and is one of the city’s most recognizable skyscrapers. The Tishman Speyer-owned tower incorporates 221 parking spaces, is LEED Silver-certified and shares 70,000 square feet of retail space with the Franklin Center at 222 W. Adams St. With a market value of $292 million, The Franklin’s owners shelled out $14 million on property taxes last year, according to our estimates.
- Data sources: PropertyShark, proprietary research (download raw data);
- Search was based on individual parcels;
- 2015 and 2016 tax values verified with Cook County Property Tax Portal and Cook County Assessor’s Office;
- 2016 second installment values were calculated based on the 2016 first installment increase;
- 2016 property tax values are estimated;
- Property images courtesy of Yardi Matrix.