Monday, March 4, 2024
spot_img
HomeReal Estate NewsCommercialREI hits reverse and moves to sell brand new HQ

REI hits reverse and moves to sell brand new HQ

Retailer and Co-op Recreational Equipment Inc. (REI) recently announced it plans to sell its newly built corporate campus in Bellevue, WA. The company’s goal is to move towards a “less centralized approach” approach to its headquarters’ presence in the Seattle area. Going forward, REI’s “headquarters” will be located in different areas throughout the region.

Meanwhile, the retailer said it will “lean into” the remote working model it used like many other companies have during the COVID-19 pandemic. Remote work will offer REI’s employees the flexibility to live and work outside of the area and give the company a chance to decrease its carbon footprint.

“The dramatic events of 2020 have challenged us to reexamine and rethink every aspect of our business and many of the assumptions of the past—that includes where and how we work,” REI President and CEO Eric Artz said during a recent video call with employees. “As a result, our new experience of ‘headquarters’ will be very different than the one we imagined more than four years ago.”

How REI’s shift from traditional HQ happened

REI initially announced plans for the new headquarters in 2016. The campus was to be built on an 8-acre site in a neighborhood known as the Spring District. Construction commenced in 2018 with a mid-summer 2020 move-in date. The company’s mindset about the headquarters changed after it moved to a nearly 100 percent remote model in when the pandemic hit in early March.

“[This year] we learned that the more distributed way of working we previously thought untenable will instead unlock incredible potential,” Artz said. “This will have immediate, positive impacts on our ability to attract and retain a diverse and highly skilled workforce, as we continue to navigate the impacts of the COVID-19 pandemic and beyond.”

These recent discoveries and desire to create more flexibility for employees influenced REI”s decision to move away from the traditional headquarters. A sale would benefit the company too, however. REI was one of the first retailers to close its retail stores proactively back in March. It was also one of the last to fully reopen, albeit under strict health and safety guidelines.
REI took several cash preservation measures during the spring while its retail stores were closed, including tighter inventory management, elective pay cuts for Artz and the company’s board of directors, headcount reductions and focusing on streamlined priorities. The measures helped stabilize the company and let REI invest in customer and staff-facing programs and innovations. Selling the Spring District campus would allow REI to invest in customer innovations, its network of non-profit partners and its carbon goals.

“I am confident that the sale of the Spring District campus would have a positive impact on REI’s future—and yours,” Artz told REI employees. “This year has shown us our home is not a building. Our home is wherever we find ourselves doing our best work, pursuing our outdoor passions, serving our communities. Serving each other. That is what we will build around as we move forward—and as we accelerate into what’s next.”

What REI’s HQ sale means for CRE

REI isn’t the first company to move to a remote work model because of COVID-19, and it won’t be the last. If commercial real estate owners will have to take at least two major steps if they want to keep their buildings occupied and financially afloat.

The first step is to take the necessary measure to ensure tenants that their building is safe to return to. These measures range from updating the building’s heating, ventilation and air condition (HVAC) system, ensuring that common areas like reception, lobbies and elevators are cleaned constantly make as many entry points as hands free as possible—entry gates, elevators, doors etc.

According to global property technology company Equiem’s recent “Global Office Tenant Report—COVID-19 Edition” report, 60 percent of its survey respondents said they wouldn’t return to their office until, “it feels safe.” That’s a significant amount of tenants who are contemplating working from home even after the pandemic. The onus will be on CRE owners to provide tenants with assurances that their property is safe.

The second big step for CRE owners to get tenants back is to have reliable connectivity. For starters, some of the safety measures previously mentioned, like air ventilation control and hands free entry will work through the in-building wireless network. If the network’s not operating correctly, neither are the safety protocols and tenants are back in their home offices. Secondly, connectivity will be important as tenants will need solid wireless networks to conduct business over video conferencing as well as their standard devices like their cell phones, laptops and tablets. It’s critical these devices work just as well, but ideally better than, as they did on tenants’ Wi-Fi network at home.

Joe Dyton can be reached at joed@fifthgenmedia.com.

- Advertisement -
- Advertisment -spot_img

Industry News

- Advertisement -