(Bloomberg) — Blackstone Group LP agreed to buy Chicago's Willis Tower, the second-tallest building in the U.S., with plans to upgrade the retail and observatory space in a bet on growth in the city.

The price was $1.3 billion, a record for a Chicago office building, according to Blackstone executives. The sellers of the 110-story skyscraper, formerly known as Sears Tower, are a group including New York-based investors Joseph Chetrit and Joseph Moinian, and American Landmark Properties Ltd.

"We are bullish on Chicago as companies expand within and move into the city and look for first-class office space," Jacob Werner, a managing director in Blackstone's real estate group, said in a statement Monday. "We see great potential in further improving both the building's retail operations and the tourist experience for one of the most popular destinations for visitors to Chicago."

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