Interior of REI's Sumner Distribution Center
REI Co-op enters into sale-lease back agreement with Madison Capital for distribution center properties
REI will continue to maintain and operate all facilities with no impact to employees
Feb 21, 2025
Specialty outdoor retailer REI Co-op entered into a long-term sale-leaseback agreement with Madison Capital, a New York based real estate investment firm, for its four, Class A distribution center properties. The co-op will continue to maintain and operate all buildings with no impact to employees.
“Based on the success of long-term leases with our current headquarters and majority of our stores, we determined a sale-lease back model was a great option as part of our overall financial and real estate portfolio management,” said Kelley Hall, REI chief financial officer. “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.”
Madison Capital paid $230M to REI for the buildings and land associated with four distribution centers in Sumner, Washington; Bedford, Pennsylvania; Goodyear, Arizona; and Lebanon, Tennessee. REI will continue to own all equipment and machinery inside each facility. REI was represented by real estate advisor and lead broker Heartland, LLC ) in cooperation with local brokers BRK Real Estate Advisors (PA), JLL (AZ) and Foundry Commercial (TN).
REI’s network of distribution centers services its more than 190 stores across the country, as well as fulfills customers’ online orders. Three of the four distribution centers are certified TRUE Zero Waste facilities, with the fourth certification in process for the newest facility. And three distribution centers are LEED certified by the U.S. Green Building Council, the world’s most widely used green building rating system. The Arizona facility was the first distribution center in the U.S. to achieve LEED Platinum certification and Net Zero Energy. The Tennessee facility is certified LEED v4 Platinum, the first of its kind in the state and the largest LEED Platinum industrial building in the Southeast.
About the REI Co-op
REI is a specialty outdoor retailer, headquartered near Seattle. The nation’s largest consumer co-op, REI is a growing community of 24 million members who expect and love the best quality gear and outstanding customer service. In addition to the co-op’s many stores across the country, outdoor enthusiasts can shop at REI.com, REI Outlet or the REI shopping app. Everyone is welcome to shop REI, but members who join the co-op enjoy a range of benefits. REI is a purpose-driven and values-led company dedicated to enabling life outside for all.
About Madison Capital
Madison Capital is a leading real estate investment and operating company focused on creating exceptional opportunities in innovation markets. Madison is based in New York City and has over $3.2 billion in assets under management. Madison invests with an institutional perspective and entrepreneurial execution led by data analytics and sound fundamentals. Madison supports and enhances the communities in which it invests. For more information, please visit the firm’s website at mcapny.com.