$250M CMBS Loan Eyed for Dallas Office Asset

A joint venture between The PRP Real Assets and Riyad Capital is on track to secure a $250 million CMBS loan to refinance 777 Hidden Ridge, a 1.1 million-square-foot office property in Irving, Texas, according to a Morningstar | DBRS presale report. Newmark appraised the asset at $371 million in June.

Bank of America will originate the two-year, interest-only note with three one-year extension options. Previous debt includes a $253.8 million note issued by Citizens Financial Group in 2019, set to mature in 2029, according to Yardi Matrix data.

KDC and Verizon completed the building in 2019, developed on a build-to-suit basis for Pioneer Natural Resources USA Inc. That same year, PRP and Riyad acquired the asset.

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Pioneer had inked a 20-year, triple-net lease set to run until 2039 with a current rate of $32.8 per square foot and a 1.75 percent yearly rent growth. The agreement has no early termination and no contraction rights throughout the remaining term.

That’s relevant as ExxonMobil acquired Pioneer for roughly $60 billion in 2024. Following that purchase, the employees at 777 Hidden Ridge were relocated to ExxonMobil’s base of operations, a 3.8 million-square-foot campus that came online in 2014 on a 385-acre site in North Houston.

Despite vacating the premises, Pioneer has full responsibility for the operations and maintenance of the building through the end of its lease and has more than $540 million in remaining rental obligations. The tenant is also looking to sublease the property, although potential deals are subject to fees and other strict criteria.

The 10-story building has 125,000-square-foot floorplates and amenities such as a conference center, gym, coffee shop, on-site childcare, medical clinic and six-story parking garage with 2,569 spaces. Outdoor features comprise fishing ponds, walking trails and sport courts.

The property is within the 12,000-acre Las Colinas master-planned development that includes commercial, residential, educational, recreational and retail spaces near the Dallas-Fort Worth International Airport. Neighboring corporate tenants include Verizon, Wells Fargo, McKesson and Kimberly-Clark.

Rising tenant demand attracts more financing deals

Dallas’ pro-business environment continues to attract new high-profile tenants. Last month, Morgan Stanley signed a 123,000-square-foot lease agreement at 1445 Ross Ave., part of the company’s larger plan to expand in North Texas with a $1.3 billion office project. Bank of America will also occupy 238,000 square feet at the 500,000-square-foot downtown Dallas project developed by KDC and Pacific Elm Properties, which is on track for completion next year.

Rising demand from high investment-grade tenants led to more favorable underwriting conditions, a trend exemplified by the $596 million CMBS loan obtained by Crescent Real Estate earlier this year. A 1.3 million-square-foot mixed-use property in Uptown, including office and retail space, serves as collateral for the note issued by Goldman Sachs and JP Morgan.