Pioneer Natural Resources' New Irving Headquarters Sells for $584 Million
The massive new headquarters built for Irving oil and gas company Pioneer Natural Resources has been sold to an investor group for $584.2 million in one of Dallas-Fort Worth’s largest real estate transactions of the year. Washington, D.C.-based real estate investment firm PRP said it partnered with capital investors in Saudi Arabia and New York to buy the 10-story, 1.1 million-square-foot building at 777 Hidden Ridge in Las Colinas. The Permian Basin exploration and production company recently moved into the glass and limestone building completed last month by developer KDC. Pioneer is leasing the building for 20 years with annual rent payments of $33 million a year, according to regulatory filings.
“The Pioneer investment is our largest investment to date,” PRP president Paul Dougherty said in a statement. He described the Pioneer campus as “one of the highest quality, fully contained headquarters buildings built in the United States.” It’s part of the $1 billion Hidden Ridge mixed-use development in Irving that also includes Verizon’s 1 million-square-foot campus. The telecom giant sold its 51-acre campus for $344 million in 2016 to Chicago-based Mesirow Financial.
Pioneer, one of the most active exploration and production companies in the Permian Basin, has faced pressure this year to improve its stock performance even though it has aggressively bought back shares. It brought its founder out of retirement and slashed operating costs by reducing its workforce by 25%. Shares closed Friday at $133.90, down considerably from a five-year peak of $209.64 in May 2018.
It’s the 17th largest public company in North Texas with 2018 revenue of $8.8 billion. The campus is PRP’s second major investment in the Dallas commercial real estate market. In 2017, it bought the FedEx Office headquarters building in Plano’s Legacy West development. The 263,621-square-foot office campus opened in 2015. That same year, Liberty Mutual Insurance bought its 1.1 million-square-foot regional office complex in Legacy West from developer KDC in a transaction estimated at almost $350 million.
Joining PRP in the Pioneer investment were Riyad Capital, a subsidiary of Saudi Arabia’s third largest bank, and New York-based private equity firm GMF Capital. PRP said it now has $1 billion invested in corporate headquarters buildings. “We remain incredibly bullish on the positive fundamentals for this sector given the myriad of investment opportunities available to us,” Dougherty said.
The Dallas-Fort Worth office market is one of the most active in the country and several major downtown Dallas skyscrapers are on the market, including the city’s tallest building...
