Well, it's official. The FTC has approved the $1.2 billion merger between Office Depot and Office Max effective on November 5. Personally, I liked the name "Office Office" for the combined company, but the word is that it will be Office Depot. For the moment, some of the 1,900 stores in the merged company will retain the Office Max name, there will be co-CEOs in Office Depot’s Neil Austrian and Office Max’s Ravi Saligram and there will be 2 corporate headquarters here in Boca Raton and in Naperville, Illinois.
Eventually, the co-CEOs will step down and a new CEO will be named. The bigger questions lie in the effect of the merger on the South Florida economy and our commercial real estate market. Office Depot employs over 1,700 people in its 625,000 square foot Boca Raton headquarters which was completed in 2008.
The effect of the merger can be either a huge windfall or a major setback for the local market. Having the combined company in South Florida could mean more jobs, more demand for office and industrial space from the main company and its vendors and increased demand in the residential market.
It would also provide a huge PR boost in promoting Florida’s business friendly climate, helping to draw additional corporate activity to our market. The State of Florida, the Business Development Board of Palm Beach County and The Greater Boca Raton Chamber of Commerce are putting their best foot forward to retain and expand Office Depot’s local presence. Ultimately, it is expected that the company will retain facilities in Florida and Illinois, but it remains to be seen which of the two locations will be the primary headquarters.
Regardless of how the “Office Office” merger shakes out, it will be one of the most important stories in the South Florida Commercial Real Estate market in 2013 and 2014. We'll keep our ear to the ground and continue to follow the situation on the Brenner Blog.