The skinny is Pioneer Natural Resources renewed 223,000 sf and added 70,000 sf, which is being touted as the largest deal in a decade for Las Colinas. The oil and gas company will remain firmly rooted through 2020 in Williams Square's West Tower at 5205 O'Connor Blvd. In Downtown Dallas, AIG has inked an 11-year lease for 125,000 sf in Plaza of the Americas' south tower at 600 N. Pearl St. And, the word is AIG isn't done dealing.
Dealmakers say Pioneer gets its extra space in spring 2009 and has an option for another 50,000 sf. AIG's lease goes into effect in January 2009.
[IMGCAP(2)]"That's a good start to the year," says Joel Pustmueller, partner of Dallas-based Peloton Real Estate Partners, which leases the 1.8-million-sf Plaza of the Americas. "This is a reflection of what went on in the last 12 months." Like others in Dallas/Fort Worth and elsewhere, he's optimistic yet uncertain about how 2008 will play out for the office market. But for now, the street's happily buzzing about the two signings.
Mark Dickenson, senior vice president of leasing for Atlanta-based Cousins Properties, tells GlobeSt.com that Pioneer, with ties to billionaire T. Boone Pickens, will sublease its extra 70,000 sf from TIG Insurance Group and then move to a direct deal in 2010 with New York City-based TIAA-CREF Global Real Estate for 293,000 sf of the 350,000-sf West Tower. The packaged play for a renewal, expansion and extension is keeping occupancy at 95% or slightly higher in the 1.4-million-sf Towers at Williams Square at 5215 O'Connor Blvd.
"Basically, this puts the West Tower to bed," Dickenson says. "They consider that West Tower as their corporate headquarters building." Pioneer's predecessor company has been a Williams Square tenant since 1991 when Pickens shifted the operation from Amarillo.
Los Angeles-based TIG Insurance, which once leased 450,000 sf in the trophy complex, has steadily downsized in the past 13 years. Dickenson says the lease for its remaining 50,000 sf will expire in May 2009.
Dickenson credits TIAA-CREF's multimillion-dollar upgrades and maintenance to being key to Pioneer's decision to keep its 900-member workforce in the building and remain the largest tenant in the Las Colinas Urban Center. The deal spans 12 of the tower's floors. The tenant reps were Staubach Co.'s Larry Toon, executive vice president, and Paul Whitman, president of Southwest corporate services. TIAA-CREF's point man was Steven Bither, director of real estate asset management. The asset's quoted rate is $28 per sf to $30 per sf plus electric.
In the Downtown Dallas win, New York City-based American International Cos. moved from the CBD in 1999 to the North Dallas suburbs. Word's been out since early last summer that it wanted to return to the CBD. And the latest buzz is AIG is planning to keep some suburban space in hand.
AIG houses several divisions in 190,000 sf on the top seven floors of the 18-story, 464,289-sf Walnut Glen Tower at 3144 Walnut Hill Lane, a 95%-leased, class A building owned by Dallas-based Prescott Realty Group and leased by Duane Henley of Radnor, PA-headquartered Brandywine Realty Trust. AIG's lease doesn't expire until February 2009.
"We've been working with them for awhile on their renewal and expansion," says Stephanie Colovas, Prescott's senior managing director. "We've not received any notice of their renewal decision."
Rick Hughes, executive director for Dallas-based Cushman & Wakefield of Texas Inc., is AIG's tenant rep. AIG won't comment on the regional headquarters lease or if it plans to hold a spot in the suburbs. What is a certainty is the lion's share of the crew is headed to floors three through nine in the 24-story, 527,980-sf Plaza of the Americas, where a $19 per sf plus electric quote hangs on the space. The deal bumps occupancy to 90% for Blackstone Group of New York City, which inherited 50% of the asset in its acquisition of now-defunct Trizec Properties Inc.
It's no secret that AIG initially was searching for 200,000 sf, which initially put it out of reach for the Plaza of the Americas' openings. Pustmueller says "we aggressively went after it" when the requirement was broken up.
Yesterday's AIG news reverberated throughout the city as the Greater Dallas Chamber announcement hit the streets. "We are clearly excited about this announcement. Not only did AIG decide to stay in Dallas, but it chose Downtown Dallas as its new home," Mayor Tom Leppert says in a press release. "We welcome them as their relocation adds to the exciting momentum already building in the city's core."
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