What Happens To Pier 1 Imports' Longtime Office Headquarters In Fort Worth?
See full BISNOW by Kerri Panchuk here.
The Texas-based headquarters of Pier 1 Imports is under close watch as the retailer liquidates all of its stores in Chapter 11 bankruptcy, Trepp Analytics reports. The Pier 1 Office Building has long been home to the home accessories retailer, but real estate experts and bankruptcy observers say it could become the next hot spot for Downtown Fort Worth office tenants if Pier 1 gives up any space.
"In all likelihood, the office space requirements are going to diminish greatly, depending on how this company emerges [from bankruptcy]," Steven Solomon, attorney and managing shareholder of Miami's GrayRobinson law firm, told Bisnow.
Solomon has represented a few Pier 1 Imports landlords, and he's closely followed the trajectory of past retail bankruptcies as an attorney. While he said he is not familiar with the particulars of Pier 1's real estate plans, past bankruptcy trends lean toward downsizing.
"In this case, because all of the retail stores are closing, you no longer require that large [amount] of office space because you no longer need the back-office operations to support the enterprise," he said. "Without having the 1,000 employees, you don’t need the huge HR department, you don’t need the big accounting department."
The Pier 1 Imports Building in Downtown Fort Worth hit the market in 2004. For more than a decade, the building has served as the corporate headquarters for Pier 1 Imports with the retailer occupying roughly 87%, or 359K SF, inside the 410K SF building, according to Trepp.
Woodland Hills, California-based Hertz Investment Group purchased the 20-story building from seller Hines back in 2018, according to CBRE, which handled the transaction two years ago.
Spokespeople for Hertz Investment Group and Pier 1 Imports could not be reached for comment on the current status of Pier 1 as a majority tenant inside the building.
But visions for what the Class-A building could become are already percolating within the Fort Worth commercial real estate market, according to Transwestern principal Kirk Kelly.
"It's a definitely a landmark [part of] the Fort Worth skyline," Kelly said. "It's one of our newer Class-A office buildings in [Fort Worth]."
Having worked in occupier services in Fort Worth for decades, Kelly says he's very familiar with the building as it's considered one of the few iconic, trophy assets in Fort Worth's central business district.
Kelly says the building already has subleased office space available for tenants. With Pier 1's recent bankruptcy announcement, Kelly says there's a high probability more space will come online for office tenants.
The office tower is not as conducive to serving multiple, smaller office tenants, Kelly said, but local office specialists have definite visions of attracting full-floor tenants and corporate relocations if Pier 1 leaves behind large swaths of space.
"This building does have the opportunity to couple its Pier 1 space with some of the other subleased space in the building to put together a very large contiguous block of space, which no other Class-A office building in Fort Worth is able to do," Kelly said.
Any space evacuated by Pier 1 could also prove valuable to the city of Fort Worth, which is currently working with multiple organizations, including Transwestern, to promote itself as a corporate relocation mecca.
"I do think this is an opportunity for the ownership group and the city of Fort Worth to really market themselves to businesses for either a corporate relocation or a big company move into this market," Kelly said.
The Pier 1 Building is an ideal site for a single-tenant corporate tenant desiring enough space for future growth, according to Kelly.
"The interesting twist to this building is that with relative ease it can be converted back into ... a corporate campus, single-tenant building," Kelly said. "There is neighboring land that is part of this building that could be used for expansion of the building or [for construction of] an additional building, which I think is a very interesting opportunity."