Office Depot just made a major real estate play in Palm Beach County.
Amid slumping sales from the e-commerce industry, the office supply retailer paid $132 million for its Boca Raton headquarters at 6600 North Military Trail, property records show. Equity Commonwealth, the Chicago-based real estate investment trust led by Chairman Sam Zell, is the seller. It traded for $211 per square foot.
The deal “strengthens our financial position by reducing ongoing expenses and providing sustained value in the property,” Office Depot CEO Gerry Smith said in a statement. The company was paying just under $17 million a year in rent, according to the Palm Beach Post.
Office Depot posted a decline in sales of 9 percent in the second quarter, down to $2.4 billion from $2.6 billion in the second quarter of 2016. The company also closed 31 stores during the first half of this year.
Last year, a federal judge blocked the proposed $6.3 billion merger of Staples and Office Depot. Amid competition from Amazon.com and other sites, the two office supplies retailers have been facing years of declining sales.
Records show Equity Commonwealth paid $171 million for the 625,000-square-foot, three-building office complex in 2011. That means the REIT sold the 29-acre property at a loss of about $39 million since its last sale six years ago.
This latest sale is the biggest office trade of 2017 in Palm Beach County, according to data from Real Capital Analytics. It blows past the $62.3 million sale of Golden Bear Plaza, a Class A office complex in Palm Beach Gardens. Alliance Partners HSP, a Pennsylvania company, purchased Golden Bear Plaza in July.
Harunobu Coryne contributed reporting.