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PRP Sheds Office Assets, Plans $2B Of Industrial, Data Center Acquisitions

One of the three buildings in the Sequoia Plaza office complex in Arlington, Virginia.

PRP is transforming its portfolio by selling a series of office buildings and planning to acquire industrial and data center assets. 

The D.C.-based real estate investment firm Monday announced it closed on the sales of office properties in Arlington, Virginia, and Austin, Texas, and it is in the process of selling properties in Dallas and Gaithersburg, Maryland. Along with the sales, the firm announced plans to acquire $2B in logistics and data center properties. 

In Arlington, PRP sold the three-building, 370K SF Sequoia Plaza office complex to Boyd Watterson Asset Management for $204.4M. It bought the property, which is occupied by Arlington County government agencies, from Foulger-Pratt in 2018 for $152M. 

In Austin, PRP sold a two-building campus featuring a 204K SF office building and a 131K SF lab building for $184M. The buildings are both fully occupied by The 3M Co., and the campus opened in 2019. PRP didn't disclose the buyer of the property. 

In Gaithersburg, PRP reached an agreement to sell Two Washington, a 294K SF office building fully leased to Leidos that it acquired for $88M in 2019. And in Dallas, it is in the market to sell a 1.1M SF office building that serves as the headquarters of Pioneer National Resources. 

The firm didn't disclose the buyer or sale price of the Gaithersburg deal, which hasn't closed, but it said the four sales will combine to total over $1B. 

PRP still owns several office buildings in D.C., California, Texas and North Carolina, according to its website. It said it remains committed to the office sector, but it is using the sales to diversity its portfolio with acquisitions in sectors that have performed better than office during the coronavirus pandemic. 

The investment firm said it is allocating $2B to acquire leased logistics assets and data center land in primary and secondary markets. PRP, which was founded by President and Chief Investment Officer Paul Dougherty in 2005, currently owns three industrial properties in Virginia, South Carolina and Georgia, according to its website. 

“The logistic and data center sectors remained highly resilient throughout the pandemic and continue to grow at rates well in excess of inflation," PRP Managing Director of Net Lease Acquisitions Joe Neckles said in a release. "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."

CLARIFICATION, AUG. 23, 5:45 P.M. ET: PRP is in the market to sell the Dallas property but hasn't yet reached an agreement on a deal. This story has been updated.