- Target offloaded a 189K SF office campus in Tempe, AZ, along with 38 acres of land, for $20.5M as the company cuts costs amid worsening financial performance.
- The property sale follows an $8M renovation in 2019, which never saw full use due to the pandemic and the shift to remote work.
- Target’s decision comes as the company reels from a 1.9% drop in same-store sales, a 20% fall in profits, and a 31% decline in stock value since January, amid boycotts and macroeconomic pressures.
Target Sheds Tempe Asset
Target has sold its former office property at 8530 South Priest Drive in Tempe, Arizona, for $20.5M, reports The Real Deal. The complex includes two buildings totaling nearly 189K SF, 25.3 acres of developed land, and 12.6 acres of adjacent vacant land. The deal, which pencils out to about $108 PSF, was confirmed by the Phoenix Business Journal.
Unused And Underutilized
The Minneapolis-based retailer spent $8M renovating the offices in 2019. But with the onset of the pandemic and a shift toward remote work, the space remained unused. The buyer, who has not been publicly named, plans to seek new tenants for the property and is exploring development options for the vacant land.
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Turbulent Times For Target
The sale comes at a difficult moment for the company. Target reported a 1.9% decline in same-store sales and a 20% drop in quarterly profits—its third straight quarter of declining sales. CEO Brian Cornell stepped down after 11 years, shortly after Q2 earnings were released.
Stock Slide
Target’s stock has dropped 31% since January, wiping out over $13B in market value. The company’s rollback of diversity, equity, and inclusion (DEI) programs earlier this year triggered a national boycott, contributing to falling foot traffic and reduced spending per customer.
Industry Headwinds
Like many other US retailers, Target is also grappling with rising tariffs, which added further pressure to its bottom line. Shares hit a 52-week low in early April following new trade policy announcements.
Why It Matters
Target’s exit from the Tempe office reflects a broader trend among major retailers offloading underutilized real estate amid shifting workplace habits and economic strain. It also underscores the growing risks for consumer-facing brands navigating political backlash and macroeconomic volatility.
What’s Next
The new owner of the Tempe property plans to reposition the asset for future office use and development. For Target, further cost-cutting and strategic repositioning may be on the horizon as the company prepares for a year of “low-single-digit” sales declines.
