Hertz Investment Group has acquired the Pier 1 Imports Building, a 20-story iconic structure in the Central Business District of Fort Worth.
The purchase is Woodland Hills, California-based Hertz Investment Group’s first in the Fort Worth market, and just the third in Texas. The privately-held real estate investment and management company earlier this year acquired two properties with more than a million square feet of office space in the Houston market.
The Pier 1 Imports Building contains 409,977 square feet of rental space, and is 100 percent occupied. The vast majority of the building is leased by its namesake, Pier 1 Imports, the national home furnishing and décor retailer.
“Hertz Investment Group’s investment strategy in every market is to acquire Class A office properties in markets poised for growth, and with the Pier 1 Imports Building we definitely believe we accomplished our goals,” said Judah Hertz, chairman of Hertz Investment Group. “The offering memorandum didn’t refer to this property as Class A space, but rather ‘Class AA, Trophy Office Space.’ We agree with that assessment.
“We also really like the Fort Worth market and believe that best-of-class buildings will attract tenants who seek nice amenities.”
The Pier 1 Imports Building sits on a 11.9-acre site between West 5th Street, Forest Park Boulevard and Summit Avenue, and overlooks the Clear Fork of the Trinity River. At approximately 325 feet in height, it ranks among the 10 tallest buildings in Fort Worth.
Built in 2004 as the corporate headquarters of Pier 1 Imports, the resplendent 20-story glass and steel office building was sold in 2008 to Chesapeake Energy and then sold again in 2014 to Houston-based Hines, which renamed it the Pier 1 Imports Building because the retailer of imported home furnishings and décor remains the building’s largest tenant. The Business Press reported in 2014 that Hines borrowed $58 million to finance the purchase.
Designed by Duda Paine Architects of Durham, North Carolina, the building has been marketed by CBRE since earlier this year. The building is typically illuminated in white lights that change colors for special and seasonal events.
Gary Carr, Evan Stone, John Alvarado, Eric Mackey, Robert Hill and Jared Chua with CBRE’s Office Investment Properties arranged the transaction on behalf of the seller.
“The Pier 1 Imports Building presented investors with a stable, in-place cash flow backed by a long-term commitment of a quality tenant who has been loyal to Fort Worth for over 50 years,” said Carr, vice chairman, CBRE. “Investors were intrigued by the opportunity to establish a large presence in Fort Worth’s Central Business District as new developments continue to scatter the city attracting residents and other businesses to the area.”
The typical floor size is 25,600 square feet and offers unparalleled 360-degree views. Amenities include a fully-equipped fitness center and parking for nearly 1,100 automobiles.
A 245-unit apartment complex is under construction next to the Pier 1 Building. Hines sold the land for the complex to Alliance Residential of Phoenix.
Hertz Investment Group owns 72 properties totaling more than 22 million square feet in 23 cities in 18 states. The company has actively been acquiring properties, more than doubling its portfolio in the last five years. It has entered the Fort Worth, Houston, Baltimore and Las Vegas markets in recent months as well as expanding operations in other cities such as Cleveland, Indianapolis, Richmond and New Orleans.
“The fact that the Pier 1 Imports Building is fully leased was certainly a positive, but there were many other factors that stood out to us about the property and the market,” said Jim Ingram, chief investment officer for Hertz Investment Group. “This is a fairly new office building that is striking in its design and with a purchase price significantly lower than it would be for new construction of similar quality.
“We believe Fort Worth is going to continue to grow. Dallas receives most of the attention, but Fort Worth has experienced tremendous growth, nearly 60 percent, since 2000. It has been voted one of America’s Most Livable Communities, and the fact is that people like to work near where they live. Hertz Investment Group will look for other acquisition opportunities in this market.”