REI was set to move more than 1,000 employees into a brand new headquarters complex built on an 8-acre site surrounded by parks and wilderness just east of Seattle in Bellevue, Wash., this summer. And then the pandemic hit.
Now the outdoor retailer is looking to sell its buildings and land in Bellevue’s Spring District, a surprising decision that reflects the rapid shift to remote work.
REI said it will move to a less centralized headquarters approach that spans multiple locations across the Seattle region. The company enacted a nearly 100% work-from-home policy for HQ staff in early March.
“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 told employees in a video call today. “As a result, our new experience of ‘headquarters’ will be very different than the one we imagined more than four years ago.”
Artz’s comments are similar to what Zillow Group said last month after the Seattle real estate giant said 90% of its staff could work remotely indefinitely, at least part of the time.
“Our old preferences have been debunked during the pandemic,” said Zillow Chief People Officer Dan Spaulding.
Artz said that having a distributed workforce “will have immediate, positive impacts on our ability to attract and retain a diverse and highly skilled workforce.”
REI said a sale of its Spring District buildings will also help the company financially with a “positive return on investment.” It made several cost-cutting moves this year, including layoffs and salary reductions.
REI has been headquartered in Kent, Wash., since 1988 and announced its intention to move to Bellevue in 2016. The co-op planned to “embed the outdoors into our campus” with green space throughout, open-air meeting locations, and more.
REI has 161 retail locations in 39 states. It reported $3.12 billion in sales last year. Its stores closed temporarily in March.
Artz said the company has outperformed its initial revenue expectations during the pandemic. Camping is surging in popularity as Americans are vacationing closer to home.
Facebook has leased more than 500,000 square feet in the Spring District, a new development with 3 million square feet of office space. The social media giant announced last week that it will allow employees to work from home until July 2021 as COVID-19 continues to spread throughout the U.S.
GeekWire reported last week that the absence of large tech employers in downtown Seattle is causing a crisis for many small business owners who rely on office workers to purchase lunch, drinks and other services.
Here is a memo Artz sent to employees today, obtained by GeekWire:
Team, I want to share the news below that I just shared with our headquarters teams
The essence of being a co-op is that we see our work, our business and our purpose differently. We exist to create meaningful and positive impact for the outdoors and for our community. And we have the courage to take the uncommon path to get there.
Today I’m making an announcement in that spirit.
We have made the decision to pursue a sale of our buildings and land in Bellevue’s Spring District—and, with that sale, to step toward a new model for our headquarters that will better serve the way we live, work and act as a force for positive change.
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.
We’ve been expanding our mobile work capabilities for the past several years in preparation for our planned headquarters move. Our progress was accelerated by the COVID-19 pandemic—we learned that the more distributed way of working we previously thought untenable will instead unlock incredible potential.
As a result, our new experience of “headquarters” will be very different than the one we imagined more than four years ago.
Rather than a single location, our “headquarters” will span multiple satellites across the greater Seattle area.
Remote working will move from a temporary solve to a more engrained, supported, and normalized model for many of our headquarters employees.
And while our home will remain in Seattle, it will be more feasible for more of our headquarters employees to have the flexibility to live and work outside of the Puget Sound region.
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.
Our members, our business, and our positive impact on society will also benefit from this transaction.
The sale of our property would bring a positive return on our investment—and with it the ability to invest a portion of that unlocked capital in ways that align with our strategic vision and our four measures of success—our impact on our employees, our members, our business and society.
These dollars would also play an important role in stabilizing our business through the ongoing impacts of current disruptions. As we’ve discussed, we’re outperforming our initial revenue expectations for how we would manage through COVID-19, but the pandemic is far from over, and it’s important and prudent that we make sure the co-op is prepared for the near-certainty of additional disruptions ahead.
The rapid innovation we’ve done in response to the COVID-19 crisis has been inspiring, but it’s also made clear the areas where we have opportunities to improve and to better meet our customers’ changing needs and expectations across our offerings and our omnichannel capabilities. We have important work to do in this space and this sale would provide financial security to help accelerate those efforts.
We know that REI’s financial stability has a direct impact on our ability to continue to support our nonprofit partners, whose work to connect people of all races, genders, ages and abilities to the outdoors matters now more than ever. The proceeds from a sale would also help us accelerate progress toward reducing our carbon footprint.
We’ll be providing more detail on all of this in the coming weeks and months, but here are the important things for you to hear and take away:
- We are actively working to find a satellite location on the Eastside.
- We are also working to secure a satellite location in the south Puget Sound.
- We are looking to extend our Georgetown lease.
In the meantime, we know that county and state guidance will continue to limit our headquarters experience for at least the remainder of 2020. And we expect the majority of our headquarters team will work from home through the end of this year and into 2021. We would still have workspaces for those whose work requires them to be physically present.
And, in the months and years ahead, this multi-location model and increased focus on remote working makes working from locations beyond the Seattle area more feasible for more employees.
With that said, I recognize working from home, and in multiple locations, brings with it, not only increased flexibility, but its own set of unique challenges.
If you’re like me, you miss the sense of community.
You miss hallway conversations.
You miss in-person work-sessions.
You miss our incredible cultural moments, like Anderson Awards.
This is a huge part of what COVID-19 has taken away. But I am confident we can solve for all of that and more through innovation, collaboration and imagination.
We will have more answers and more detail in the next 60-90 days as work toward the completion of a potential sale.
It’s important that you know this has been a challenging decision. I know it’s going to land differently with everyone, and I want to thank the teams that poured a great deal of time and passion into this project. And I am confident that the sale of the Spring District campus would have a positive impact on REI’s future—and yours.
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.
Thank you for having the courage to step into this moment. I look forward to the work ahead.
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