Coronavirus News
REI Built Iconic HQ. Now Company Wants to Sell Before Moving In…
Recreational Equipment Inc. is looking to sell its custom-made new headquarters and allow employees to work from home or other offices, the latest sign that the pandemic is driving companies to ditch central offices to raise cash. The retailer, known as REI, was poised to open the new Seattle-area headquarters this summer after creating a…
Recreational Equipment Inc. is looking to sell its custom-made new headquarters and allow employees to work from home or other offices, the latest sign that the pandemic is driving companies to ditch central offices to raise cash.
The retailer, known as REI, was poised to open the new Seattle-area headquarters this summer after creating a unique building that reflected the company’s outdoorsy image and could serve as a way to recruit new employees. The property features outdoor staircases and bridges, a courtyard of native plants, and skylights to let in sunshine and air.
But the cooperative said on Wednesday it was trying to find a buyer for the property before ever moving in. Instead of a single headquarters, REI will open a number of smaller offices and allow employees to work remotely, the company said. Employees have been working from home since March.
REI’s about-face on a building that was two years in the making offers the latest example of how the coronavirus pandemic is changing daily work habits and upending the office sector.
Many companies say they have been surprised by how productive remote work has been, and they plan to allow their employees to work from home on some days even after the pandemic is over. The recession has also increased pressure to shore up finances. Trying to terminate expensive office leases or selling properties is one way to boost cash.
“The dramatic events of 2020 have challenged us to re-examine and rethink every aspect of our business and many of the assumptions of the past,” REI CEO Eric Artz said in a statement. “That includes where and how we work.”
REI is the latest in a growing list of companies embracing remote work. Twitter Chief Executive Jack Dorsey, for example, said in May that the vast majority of the company’s employees would be allowed to work remotely indefinitely. Facebook CEO Mark Zuckerberg has said that he expects half the company’s employees to work remotely within a decade. While few observers expect companies to ditch the office altogether, many expect that firms will use less space in the future and in some cases switch from a single, big headquarters to multiple smaller locations.
Jamie Hodari, CEO of co-working company Industrious, said companies have been moving toward flexible work schedules and opening small offices in more cities for years but the trend has accelerated during the pandemic. He is also seeing companies looking to distribute their workforces over several small office locations within a single city. REI is one of the first companies to go public with its plans, he said.
“This is going to be a thing you will hear from hundreds of Fortune 500 companies,” he said.
REI’s chief customer officer, Ben Steele, said the company is now looking for smaller offices close to where its employees live in a bid to cut down on commutes. When the company began building its headquarters in 2018, the thought was that “for us to be able to collaborate effectively, we need to be in a single location,” Mr. Steele said. But over the past couple of months, Mr. Steele said, the company learned that collaboration works fine even if everyone is in their living rooms.
Money is another concern. REI’s business has been hurt as the company closed its stores during the height of the pandemic. By selling the headquarters, the company hopes to raise cash that it can invest in other parts of the business.
The company declined to say how much it spent to build the headquarters or what sales price it expects to achieve. REI is selling at a time when demand for office properties looks weaker than it has been in many years, and it is marketing a property that was uniquely tailored to a specific user. A company spokeswoman said REI still hopes to make a profit.
While the property offered an “attractive work environment,” Mr. Steele said, the added flexibility of remote work would more than make up for the loss. “I’d love to have time in the outdoors even more than I’d love to have an office that’s connected to the outdoors,” he said.
Write to Konrad Putzier at konrad.putzier@wsj.com
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