In a move that would seem to settle any questions about Office Depot’s future in Palm Beach County, the Fortune 500 retailer this week paid $132 million for its headquarters.
Office Depot (NYSE: ODP) bought the 625,000-square-foot complex at 6600 N. Military Trail from its landlord, Equity Commonwealth (NYSE: EQC) of Chicago. The landlord paid $171 million for the property in 2011, according to property records.
“We are thrilled that we could acquire our corporate headquarters in Boca Raton, as it demonstrates our commitment to South Florida and strengthens our financial position by reducing ongoing expenses and providing sustained value in the property,” Office Depot Chief Executive Gerry Smith said Friday in a statement.
Equity Commonwealth said it collected rent of just under $17 million a year on the three-building complex, or about $27 per square foot.
Despite its shrinking sales in recent years, Office Depot is one of Palm Beach County’s most prestigious corporate citizens. Its headquarters employs 2,000 workers, and the retailer is one of only two Fortune 500 companies based in the county. (NextEra Energy of Juno Beach is the other.)
Local business boosters welcomed the real estate deal as a vote of confidence by Office Depot on its future in Boca Raton.
“I’m reading that as really good news,” said Troy McLellan, head of the Greater Boca Raton Chamber of Commerce. “It says Office Depot is committed.”
Office Depot’s future in Palm Beach County has been in doubt on a number of occasions. In 1996, Office Depot announced a merger with its larger rival, Massachusetts-based Staples. But federal regulators blocked that deal.
In 2006, when Office Depot was in growth mode, Palm Beach County officials said Georgia, Tennessee, North Carolina and South Carolina had offered incentives to lure the headquarters away. The county and state offered tax incentives to keep the company in Palm Beach County, and Office Depot moved out of its former headquarters in Delray Beach and into a newly built complex in Boca.
In 2013, after Office Depot bought smaller rival OfficeMax, the company considered moving to OfficeMax’s hometown of Naperville, Ill., but stayed in Boca.
Finally, in 2015, Office Depot tried to sell itself again to Staples, but federal regulators nixed the marriage last year over competitive issues. The latest deal seems to mean that Office Depot is here to stay.
However, Office Depot continues to struggle with shrinking sales. Revenue fell from $5.5 billion in the first half of 2016 to $5 billion in the first half of 2017, the company said this week.