Trizec Will Own Sears Tower

Trizec Properties will be assuming ownership of the Sears Tower in January 2003 “with the passage of time,” not as an option, according to Timothy Callahan, president and chief executive officer of the real estate investment trust.In a conference call, Mr. Callahan said he wanted to put to rest market misinformation that the office REIT has the option to assume ownership of the landmark Chicago high-rise next year. The addition of the property to the Chicago-based REIT’s portfolio will add about $750 million of debt to its balance sheet, according to the company. Trizec is still in discussion with insurers about pricing for terrorism insurance on the property, and expects insurers to provide rate quotes by early next year. Mr. Callahan views the recently passed terrorism insurance legislation as a positive factor in negotiating the rates. In response to a question, he said Goldman Sachs and Merrill Lynch, two major tenants at the Sears Tower, are moving out of the property next year. Trizec is projecting funds from operations ranging from $1.72 to $1.82 per share for 2003.