Rubenstein Buys PepsiCo’s Dallas Campus

5600 Headquarters Drive. Image via Google Street View

Rubenstein Partners LP follows the underlying fundamentals as it enters the metropolitan Dallas market with the acquisition of 5600 Headquarters Drive in Plano, Texas. The office real estate company acquired the 250,000-square-foot former PepsiCo campus from PepsiCo Inc. for an undisclosed amount.

In terms of neighborhoods, Rubenstein chose well for its debut in the Dallas market, which is finally showing notable signs of improvement. “Upper Tollway/West Plano has emerged as one of the most dynamic office submarkets in Dallas-Fort Worth,” according to a fourth quarter 2021 report by Bradford Commercial Real Estate Services. “In the last few years, the area has been a hotbed for corporate relocations and large back-office operations.”

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Located on a 27-acre site near the intersection of the Dallas North Tollway and the Sam Rayburn Tollway, the building at 5600 Headquarters first opened in 1999, approximately 20 miles from the Dallas CBD. The PGAL-designed, three-story structure is a unique property featuring a modern design that comprises three pods linked by corridors of varying levels.

5600 Headquarters Drive. Image courtesy of Rubenstein Partners

5600 Headquarters last changed hands in 2003 when PepsiCo acquired it from Citizens Telecom for just over $25 million, according to Collin County records. Rubenstein and Cresa, the firm that arranged the sale on behalf of PepsiCo, are remaining mum on financial details of the transaction, but time has evidently been kind to the office asset in terms of property value. The 2021 assessed value of 5600 Headquarters was $60 million, according to records from Collin County.

Rubenstein envisions transforming and repositioning 5600 Headquarters as a top-of-the-line, experiential office destination. The company will take the property to a new level by executing a renovation program that will include a revamped amenities package yielding such offerings as a new fitness facility, tenant lounge, conference center and dining. Rubenstein has tapped Lincoln Property Co. to take on leasing responsibilities for the office listing.

Right tools for the job

Rubenstein’s plans at 5600 Headquarters may seem lofty, but the company is no stranger to converting a run-of-the-mill office property into a coveted workplace address. Just before COVID-19 took hold across the U.S., in April 2020, Rubenstein partnered with coworking solutions provider Cove to create Powered by Cove, a program that merges office and hospitality with technology and amenities into an overall building experience. The partners launched the program at 2600 Tower Oaks—the approximately 179,400-square-foot office building just outside Washington, D.C., in Rockville, Md., that Rubenstein acquired through its Fund III in early 2019—and the program has proved a success.

At 2600 Tower Oaks, Rubenstein combined its knowledge of state-of-the-art workplaces with Cove’s expertise in cutting-edge technology and hospitality options to design the premier office space. And, to accommodate the sudden need for flexibility that came with the pandemic, the partners adapted the Powered by Cove program to offer such options as a month-to-month spec suite and even inked a one-year “as-is” deal in another spec suite. Since Powered by Cove has been in place, the leasing team at 2600 Tower Oaks has executed dozens of leases, the majority of which have been new agreements.

Just last week, Rubenstein and Cove announced they would expand the Powered by Cove program to Rubenstein’s Carlyle Tower a 375,000-square-foot property in Alexandria, Va., and its 90,000-square-foot office building at 111 K St. N.E. in Washington, D.C. There has been no word yet if Rubenstein plans to incorporate the program at 5600 Headquarters.