REI Co-op has entered a sale-leaseback agreement for its four Class A distribution centers for $230 million.
Employees and ongoing operations will not be impacted by the change in ownership, according to a news release.
New York-based real estate investment firm Madison Capital acquired the properties, which include both buildings and land. REI will continue to own all machinery and equipment at each location. The properties are in:
- Sumner, Wash. It has been owned and operated by REI since 1992, reported the News Tribune newspaper. It was expanded in 2004. Madison acquired it for $101.3 million.
- Goodyear, Ariz. It opened in 2016 and was the first distribution center in the U.S. to achieve LEED Platinum certification and Net Zero Energy, according to the release.
- Lebanon, Tenn. It opened in 2023 and is certified LEED v4 Platinum – the first of its kind in the state and the largest LEED Platinum industrial building in the Southeast.
- Bedford, Penn. It opened in 2007 and employed more than 300 people as of Jan. 2024, reported the Bedford Gazette.
“Based on the success of long-term leases with our current headquarters and majority of our stores, we determined a sale-leaseback model was a great option as part of our overall financial and real estate portfolio management,” said Kelley Hall, REI chief financial officer, in a statement. “Madison Capital was selected as the strongest partner after a thorough process that included interest from multiple buyers. We are enthusiastic about our partnership and their support of our commitment to sustainability.”
REI’s financial challenges have led to major downsizing in recent years in several areas of the business, including its distribution centers. Earlier this year, it eliminated 428 full-time jobs after closing down its Experiences travel and excursion business, because it was operating at a loss. In 2024, REI laid off 357 employees, including 200 at headquarters, six in sales and customer support, 30 in Experiences, and 121 in its distribution centers. And in 2023, REI laid off 275 store workers.
The retailer is in the process of transitioning its leadership from former CEO Eric Artz to incoming CEO Mary Beth Laughton, who previously served as a member of REI’s board of directors and has also worked at Nike, Sephora, and Athleta.
REI lost two key executives last year: Former EVP and Chief Customer Officer Ben Steele, and former Senior VP Chris Speyer, who left for Mountain Equipment Company.
In 2020, REI sold its corporate headquarters and leaned into remote work.
REI’s network of distribution centers serve its more than 190 stores nationwide and fulfills its e-commerce business, the company said. Three of the four distribution centers are certified TRUE Zero Waste facilities, with the fourth certification in process for the newest facility.
