Electronics retailer Best Buy is taking a multitrack approach to boost attendance at its suburban Minneapolis campus and use space that has been largely gathering dust in the aftermath of the pandemic.
The Richfield, Minnesota-based chain will soon require all its corporate employees to show up at least four days a week instead of three, a step that echoes those made by other large employers across the country that increasingly view in-person work as central to a company's overall performance.
For Best Buy, that means adding Monday to what has been a Tuesday through Thursday schedule for a majority of the workers based out of its headquarters campus. The new policy, taking effect in September, lands as executives try to tighten their expenses and dump any extraneous costs — including its real estate.
The retailer last month started marketing more than a fifth of its 1.5 million-square-foot corporate headquarters at 76th & Penn. That effort has been in response to declining attendance among its workforce as many of its employees have extended their pandemic-era habits of working from home.
The listing totals just shy of 313,000 square feet across six floors and, with help from CBRE, is looking to cater to prospective tenants that want move-in-ready space and access to a slew of amenities that haven't been enough to lure Best Buy's own workers back to the office.
It isn't clear how the mandate will affect Best Buy's aim to land a tenant for some of that space. A company spokesperson did not immediately respond to CoStar News' requests for comment.
'Driving growth'
What is certain, however, is that the heightened in-office policy is aimed at bolstering Best Buy after an extended period of declining sales.
With Monday as "a critical day in retail," the company told employees in a memo — viewed by CoStar News — that its new mandate is "complex, iterative and depends on us being highly collaborative."
Best Buy's annual revenue has fallen nearly 20% over the past five years, a trajectory the retailer is hoping to turn around through more in-person work.
"We have started to create meaningful momentum this year," executives wrote. "This next chapter is about being bolder, taking bigger swings and moving more urgently than we have before to continue driving growth in this fast-paced retail environment."
Best Buy's new attendance policy aligns with other corporate America heavyweights that view remote or hybrid work as an impediment to growth and innovation.
Companies nationwide are demanding more in-person time from employees, either by revoking flexible work privileges, increasing the number of days they're required to be in an office or asking a portion of the workforce to move closer to a corporate hub.
Some of the country's largest landlords have said that stricter in-office mandates are enough to bolster optimism that demand for space will climb as big corporations push to revert to their pre-pandemic workweek schedules.
The number of CEOs who believed their companies would adopt a full return to a five-day workweek climbed to about 85% from the 64% reported in 2023, according to a KPMG survey.
Hybrid mandates have plummeted from about 80% to roughly 40% over the same period, and only 1% of companies continue to allow fully remote policies, according to a JLL survey.
Readjusted values
The headquarters listing, coupled with its revised attendance mandate, is the latest step Best Buy has made as the company has tried to absorb the pandemic-related impacts now engrained in its day-to-day operations.
In late 2023, the company requested a property tax break on the campus, with executives claiming it had lost some value as a result of work-from-home policies. In exchange for subsidies Best Buy received to help fund its construction, the retailer agreed to pay property taxes based on a valuation of no less than $118.5 million until the end of last year.
Best Buy looked to cut its own campus valuation by more than $37 million and argued that it is not worth nearly as much as it was before the pandemic sent office properties nationwide spiraling downward.
Best Buy officials then said that figure had dropped to as little as $60 million.
The Richfield complex cost about $300 million to develop, including public subsidies that totaled just shy of $60 million. The retailer has owned and occupied the entire ninja star-shaped campus at 7601 Penn Ave. South since it was built in the early 2000s.