WASHINGTON, D.C. — PRP, a privately held real estate investment and management firm based in Washington, D.C., is making a sea change as it looks to bolster its logistics and data center portfolio and churn its office assets. The company is in the process of selling four office campuses in separate deals totaling more than $1 billion.
At the same time, PRP is allocating $2 billion to acquire logistics facilities leased to credit-worthy companies in primary and secondary markets, as well as data centers and land zoned for future data centers. The specific locations of the assets were not disclosed.
“The assets that we are acquiring are located in attractive markets backed by solid demographics, high barriers to entry and historically high industrial occupancy rates,” says Joe Neckles, managing director of net lease acquisitions at PRP. “The logistics and data center sectors remained highly resilient throughout the pandemic and continue to grow at rates well in excess of inflation.”
The office assets that PRP is selling include Sequoia Plaza, a 370,000-square-foot campus spanning three buildings in Northern Virginia’s Arlington County. The property houses the headquarters of Arlington County’s Department of Human Services and the Arlington County Public School System. An affiliate of Boyd Watterson Asset Management purchased the property from PRP for $204.4 million.
An affiliate of Boyd Watterson Asset Management purchased Sequoia Plaza in Arlington County from PRP for $204.4 million. (photo courtesy of PRP)
PRP also recently closed on the $184.4 million sale of the 3M Austin Office and Lab Campus, a new, two-building research and development complex located in Austin’s Northeast submarket within the Parmer Austin development.
Completed in 2019, the properties consist of a 204,400-square-foot office building and a 131,425-square-foot laboratory and house approximately 500 3M employees. St. Paul, Minn.-based 3M, a global conglomerate specializing in healthcare and consumer goods manufacturing, has 13.5 years remaining on its triple-net-lease.
PRP has also entered into an agreement to sell Two Washingtonian, a 294,000-square-foot office building in Gaithersburg, Md. The property is leased to Leidos (NYSE: LDOS), a life sciences and IT company that provides services and solutions in the defense, intelligence, civil and health markets domestically and internationally.
Lastly, PRP is selling the corporate headquarters for Pioneer Natural Resources (NYSE: PXD), an oil and gas exploration and production company. The Dallas property spans 1.1 million square feet of office space.
Pioneer Natural Resources, an oil and gas exploration and production company, moved to this new Irving property in 2019. (Photo courtesy of KDC)
The buyers for the 3M, Leidos and PNR office properties were not disclosed.
“We have worked hard to build a large portfolio of the highest quality credit net lease office assets in the top Tier 1 markets of the United States,” says Paul Dougherty, PRP’s founder, president and chief investment officer. “As we continue to drive value for our investors and partners, we will selectively add additional credit net lease office, data center and logistic properties to our portfolio.”
Since its formation in 2005, PRP has acquired, developed or invested in 46 assets across the country with a value exceeding $5 billion. The company’s portfolio spans multiple property sectors but focuses on corporate headquarters facilities leased to investment-grade companies on a long-term basis, as well as value-add multifamily properties and office assets.
— John Nelson