Facebook will purchase Recreational Equipment, Inc.’s (REI) recently constructed headquarters in Seattle, according to The Wall Street Journal and other news outlets. The outdoor clothing and equipment retailer put its headquarters up for sale last month. REI reversed course because of the COVID-19 pandemic and decided to let employees work from home or its regional offices.
The tech giant is paying $367.6 million for the property. REI also sold undeveloped land around the building to developers Wright Runstad & Co. and Shorestein Properties.
Facebook continues to acquire CRE amid COVID-19
Facebook’s decision to purchase REI might come as a surprise to some given it’s letting employees working from home until next July. The social media company was an active real estate shopper before the pandemic however and does not appear to be getting off of that course. The REI headquarters acquisition gives Facebook more than 3 million square feet in the Seattle area, per Vijaye Raji, head of Facebook’s Seattle office. The company is attracted to the area because it boasts a large engineering talent pool and has potential as a “transit hub.”
“In order to address our rapidly growing workforce, we continue to make investments in physical office locations,” Facebook said in a statement. “In the second quarter of 2020, we added a record 4,200 net new employees and now have more than 52,000 employees. While Facebook envisions 50% of its employees will be working remotely within the next 5 to 10 years, our offices are still vitally important to our culture and will help accommodate anticipated growth and meet the needs of our employees that need or prefer to work from campus.”
Meanwhile, Facebook also leased 730,000 square feet of office space in the James A. Farley Building in New York. The lease gave Facebook 2.2 million square feet in the Big Apple.
“Facebook first joined New York’s vibrant business and tech community in 2007,” Facebook spokesperson, Jamila Reeves, said in a statement last month. “Since that time, we’ve continuously grown and expanded our presence throughout the city. The Farley Building will further anchor our New York footprint and create a dedicated hub for our tech and engineering teams.”
REI looks to rebuild after selling HQ to Facebook
REI’s decision to sell its headquarters to Facebook not long after it finished construction is a sign of COVID-19’s impact on businesses. Selling REI’s headquarters to Facebook will provide the retailer with more cash on hand to put towards other parts of the business, however.
“The sale represents a positive return on the co-op’s investment in the property and will enable important investments in REI’s customer-facing innovations, its nonprofit partners and carbon reduction goals,” the company said in a release. “Rather than a single location, the co-op’s future ‘headquarters’ will span multiple satellite locations across the region, and the company will lean into remote working as a more engrained, supported and normalized model for headquarters employees.”
Joe Dyton can be reached at email@example.com.