In this morning's press release, Alex Smith, president and CEO of the Fort Worth-based Pier 1, says the agreement calls for a seven-year lease for 250,000 sf to be signed in tandem with the sale. Pier 1 developed the 14.6-acre Downtown campus at 100 Pier 1 Place in 2004. According to an SEC filing, the lease terms include one three-year renewal option and the right to terminate the agreement at the end of the pact's fifth year.
Smith says the executive team has spent the past year "evaluating options" for its headquarters. "We had three goals in mind: recouping our investment, minimizing on-going costs and finding a quality business partner for a leasing relationship," he says.
Chesapeake's 45-day due diligence clock began ticking March 25, the actual date of the agreement's signing, according to the SEC filing. The parties of record are Chesapeake Land Co. LLC and Pier 1 Services Co., a wholly owned subsidiary of Pier 1 Inc. The document includes the standard 30-day closing requirement once due diligence ends. Pier 1 will hold a fourth-quarter earnings call April 10.
It's been no secret that Pier 1 has been shopping its trophy building. The rising value of real estate in Fort Worth and sagging retail numbers undoubtedly were at the forefront of the decision. Chesapeake, through natural gas wells, has pumped billions of dollars into the local economy in recent years. Chesapeake did not return telephone calls by press time to comment on its plan for the balance of the building.
Pier 1's campus was developed practically simultaneously with RadioShack Corp.'s headquarters building at 300 RadioShack Circle, which was sold in December 2005 to KanAm Grund Kapitalanlagegesellschaft mbH. It was a 20-year sale-leaseback with 20 years of renewal options.
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