Facebook buys REI’s new HQ in coronavirus sale
The $367.6M sale is latest indicator that big tech is driving commercial real estate markets
Facebook Inc. is buying the custom-designed Seattle-area headquarters of Recreational Equipment Inc., whose business has been pummeled by the coronavirus pandemic.
Economic pressures from COVID-19 have forced the outdoor retailer and other companies to overhaul their operations, with many opting to cash out expensive office buildings while employees work remotely or from smaller sites instead.
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The companies announced the deal on Monday.
Facebook is paying $367.6 million for the 400,000-square-foot campus in Bellevue, Wash. The complex -- which REI had initially been planning on occupying by summer -- features outdoor staircases, bridges, a courtyard of native plants and skylights to let in sunshine and air, according to The Wall Street Journal.
REI also sold undeveloped land on the property to the developers Wright Runstad & Co. and Shorenstein Properties for a total price of $390 million.
With the sale, the company expects to generate cash for other parts of its operation. The move demonstrates one of the ways in which the pandemic has impacted where and how companies house their workforces, and which ones do so at all.
Large tech companies like Facebook, Google, and Amazon are among the most recent to reopen their offices, though Facebook CEO Mark Zuckerberg previously told The Wall Street Journal he expects as many as half of his firm’s employees to work from home within a decade.
The social media giant's appetite for real estate hasn't abated, however. In New York City, Facebook has recently agreed to lease the entire 730,000 square feet of office space in the historic James A. Farley Building, the Postal Service structure in midtown Manhattan that dates to 1912.
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The REI property is located next to three other Facebook-owned buildings under development in Bellevue’s Spring District, and the Seattle area has become Facebook’s largest engineering hub outside its Menlo Park, Calif., headquarters.