Last fall, when it became clear that the American Airlines-US Airways merger was going to happen, the Fort Worth-based company began looking at ways to accommodate US Airways employees who would relocate to American’s headquarters. John Nicks, vice president of corporate services and supply chain for American Eagle, saw it as an opportunity to give the regional carrier something it had never had—a home of its own.
Nicks approached Pedro Fábregas, the company’s president and CEO, about relocating to new headquarters space. “We floated it up the ladder,” Nicks said. “And here we are.”
This summer, American Eagle’s 600 North Texas employees will move out of American Airlines facilities and into their own campus. The company has leased about 142,000 square feet at 4301 and 4401 Regent Boulevard in Irving.
Established in 1984, the company is one of the largest regional carriers in the world, with 14,000 employees and 1,700 daily flights to more than 150 cities throughout the United States, Canada, the Bahamas, the Caribbean, and Mexico. Its seven major hubs are in Dallas-Fort Worth, New York (JFK and LaGuardia), Boston, Miami, Los Angeles, Chicago O’Hare, and Raleigh-Durham.
A formal headquarters search, operating in the market as “project pelican,” got under way in earnest late last year. It was led by American Eagle’s brokers, Steve McCoy and Alan Harrington with Transwestern and Troy Baron with Weston Commercial, and site location consultant Linda Burns of Burns Development Group.
Locally, the team evaluated options in Lewisville, Coppell, Farmers Branch, Fort Worth, Flower Mound, and Irving.
“We started with about 10 buildings,” said Fábregas, then it went to eight, then six, then four, then two.” But then an interesting off-market opportunity came up—the final piece of an intricate puzzle involving Nokia and Epsilon.
Last year, the fast-growing Epsilon began running out of space at its Irving headquarters. It was looking to add another 12,000 to 15,000 square feet nearby, and was eyeing space at 6301 Connection Drive. But property owner Piedmont Office Realty Trust was thinking bigger.
Knowing that Nokia, the tenant in its sister building, 6201 Connection Drive, was occupying only part of the facility, it worked with its brokers—Sarah Hinkley and Grant Sumner from Peloton Commercial Real Estate—on a scenario that would move Nokia to another Piedmont property, Las Colinas Corporate Center II. This would allow Epsilon to lease the entire 250,000-square-foot building on Connection Drive and keep all of its employees under one roof.
To make it happen, Piedmont acquired an 11-acre tract adjacent to the former Nokia space to accommodate Epsilon’s future growth. It also reworked a Nokia lease in another property it owned in Boston. The clincher, though, was for Epsilon to find a tenant to sublease its Regent Boulevard space.
And that’s where American Eagle came in. The regional carrier inked a 49-month sublease with Epsilon to take over its Regent Boulevard campus; an extension with the property owner will take the full term up to 10 years.
Johnny Johnson and Rodney Helm with Cassidy Turley represented Epsilon and the property owner in the two-part deal.
Relocation Challenges
Epsilon will move to its new space in June, with American Eagle taking occupancy of the Regent Boulevard campus a few weeks later. Employees will be coming out of seven different American Airlines facilities. “We’ve never been in just one place,” Nicks said. “It’s great to be part of American, but we’ve had to kind of take space where it’s available. American is so huge, so spread out, that we’ve been spread out, too. We think there will be great benefits to having everyone together.”
Along with headquarters personnel, the new campus will house American Eagle’s systems operations control (SOC) center and training facilities. This involves moving huge flight simulators—a personal property tax boon for Irving—and dispatch operations.
Nicks said the Federal Aviation Administration had to approve the relocation, as all American Eagle flights are dispatched from North Texas. “There can’t be any hiccups or power outages,” he said. “If we go down here, we don’t take off in 170 cities across the country.”
The regional carrier will need to build out come classrooms, but for the most part, Epsilon is leaving behind plug-and-play space, including a large cafeteria. This will be particularly useful as American Eagle will host about 100 pilots and flight attendants per week from across the country for training. “The hotels in the area are going to be very busy,” Fábregas said.
Going forward, American Eagle will be known as Envoy. Despite the name change and new headquarters campus, Fábregas said at a press conference that it shouldn’t signal an Envoy spinoff from American.
Burns said the deal is a big win for Irving. “It’s rare that an airline relocation project occurs, and, for that matter, significant headquarters projects of any industry type,” she said. “The aviation and aerospace industry is one of the key target industries of our state, and American Airlines and American Eagle are major staples of our regional economy.”
Irving officials said the relocation will bring more than $2.4 million in taxable property during the first four years of Envoy’s lease. The city has been on a hot streak lately; it’s also getting closer to winning a headquarters relocation from 7-Eleven Inc.
