The high-profile office campus in the Dallas-Fort Worth region that was formerly the headquarters of department store giant J.C. Penney was bought by a real estate investment firm, representing a major redevelopment opportunity that could lure a big office tenant to one of the hottest U.S. office markets.
The property: Capital Commercial Investments, based in Austin, Texas, purchased the 1.8 million-square-foot former J.C. Penney campus now called The Campus at Legacy West at 6501 Legacy Drive in Plano, Texas, for about $385 million last year. The campus located on over 50 acres adjacent to the Legacy West mixed-use development was in the process of being repurposed as a multitenant office building.
The backstory: J.C. Penney rejected its long-term 1.2 million-square-foot lease in the building as part of its Chapter 11 bankruptcy proceedings in 2020. The Campus at Legacy West was placed on the market at the beginning of 2021 by Cushman & Wakefield after lender Beal Bank foreclosed on the property in November 2020.
Why it matters: This deal puts a largely vacant campus in the hands of a well-capitalized investor with experience in repurposing large single-tenant office campuses. The new ownership group plans to consult with the city of Plano to help put together a master plan for the development tract.
What's next: Capital Commercial has hired JLL to lease the property, with T.D. Briggs, Chris Wright, Blake Shipley and Ashley Curry listed as the property brokers. The firm plans to soon finalize the hiring of an architecture firm to help further amenitize the campus. The amenity plan could be implemented before the end of the summer.
What they're saying: "I'm in love with the property, and I can't wait to fix it," said Doug Agarwal, founder and president of Capital Commercial. "The bones are just amazing, and the location is formidable."
Legacy West is one of the most sought-after business addresses, with Toyota North America, NTT Data and FedEx Office calling this part of Plano home. In the past month, Agarwal said he's hosted more would-be tenant tours than his team had the six months prior, with big office tenants returning to the market to lease space after a period of uncertainty tied to the pandemic.
"With this property, we now have enough square feet in the marketplace that if a monster tenant comes to town, they have to look at us," Agarwal said. "We're looking forward to signing our first tenant in the coming months."
CoStar's Impact Awards highlight the commercial real estate transactions and projects that have transformed their markets over the past year. The winners are chosen by independent panels of industry professionals who work in the markets they judge. A list of judges can be found here and the criteria for selecting winners can be found here.