J. C. Penney Company, Inc. announced today that it has completed the sale of its home office building and surrounding 45 acres of land in Plano, Texas to Dreien Opportunity Partners.
According to Collin County deed records, the deal was made official at the very end of 2016. Sam Ware’s Dreien Opportunity Partners paid more than $400 million for the 1.8 million-square-foot office building and the surrounding 45 acres, The Dallas Morning News reports.
“Since we began exploring the sale of our Home Office, we have been quite pleased by the level of interest in the building. Our team reviewed numerous offers and decided that it was most advantageous to select Dreien Opportunity Partners, whose leadership recognizes the building’s long-term potential and has demonstrated tremendous support of [J.C. Penney] as we maintain our…operations within the booming Legacy corridor,” said Marvin R. Ellison, chairman and chief executive officer for J.C. Penney.
The purchase couldn’t come at a better time for the new buyers as the $3 billion Legacy West development begins to open its doors this spring. Penney teamed up with Karahan Cos., KDC and Columbus Realty to develop the 240 acres back in 2014, and it’s now the largest real estate project currently underway in North Texas, according to The Dallas Morning News.
The new owners have plans to develop and sell the 45 acres around the offices, as well. Additionally, they will renovate about one million-square-feet of office space in order to rent to other business.
Penney’s 3,000 employees will continue to work on the campus, but their offices will be downsized to about 1.1 million-square-feet at the north end, or 65 percent of the building.
J.C. Penney made the sale with a gross sale price of $353 million before closing and transaction costs. J.C. Penney announced back in February that it planned to cut costs by selling the home office. The building lease expense would be offset by a reduction in maintenance costs, property taxes and interest expense as a result of paying down debt with proceeds from the transaction, according to J.C. Penney.
“This transaction also represents a significant financial milestone for the Company, as proceeds from the sale give us the opportunity to reduce outstanding debt and make improvements to our work-space, creating a modern and efficient environment that fosters productivity and seamless collaboration,” Ellison says.
The Dallas Morning News reports the vacant land, made up of lawns and a small pond, is zoned for office and retail space, but developers will keep the pond.
The home office was originally finished in 1992, complete with a James Cash Penney statue in the grand rotunda. Penney planned the move from its Manhattan office after they purchased 429 acres from EDS for $25 million.