Rite Aid’s new Navy Yard remote HQ is ‘not an office’

The future of white-collar work will not be in an office.

That’s the message Rite Aid CEO Heyward Donigan delivered at the ribbon cutting for her company’s new “remote” headquarters at Philadelphia’s Navy Yard.

“I want to let you all know that this is not an office,” Donigan said. “This is a collaboration center. There is no one that actually works here on a full time basis. … We’re here to introduce the new modern way of working and the new modern Rite Aid.”

The company’s new headquarters occupies the entire second floor of a seven-year-old office building at 1200 Intrepid Ave. It consists of a series of conference rooms and kitchens, with smaller and more private spaces that can be reserved. There are no personalized offices.

The interior of Rite Aid’s headquarters is all glassy expanses, white paint, and central air. There are mini-fridges stocked with Coca-Cola products and beer. Snacks are always in easy reach. There is a luggage storage chamber, and a respite room for meditation and prayer. The boardroom is still awaiting an appropriately stately table, held up by supply chain issues.

The company will employ an on-site general manager to oversee the space, but no permanent staff are required to reside in the Philadelphia region. Donigan says it is too early to say how many meetings will be held at the new headquarters annually, or what proportion of the year the building will be occupied. But she anticipates a “constant series” of visitors.

“The main attraction is this building and the fact that it is easy to get to,” Donigan said in an interview after the ribbon cutting. “There is a hotel right here. We can cater and bring food in. We don’t need to necessarily be going out and about: The idea is to be together seamlessly.”

Rite Aid is celebrating its 60th anniversary and the company has been based in Pennsylvania for its entire history. When considering a move from the previous headquarters in Camp Hill, near Harrisburg, Donigan needed an airport with an array of direct flight offerings. Philadelphia is the only location in the state to meet that requirement.

Rite Aid will not just be using the headquarters for meetings within the company, but will also offer its Navy Yard location to host clients, consultants, and suppliers. On the day of the ribbon cutting, there were about 80 people on site from across the country, including representatives from a Texas-based laboratory company that works with Rite Aid.

The Navy Yard’s isolated location means that spillover spending at retail or restaurants will be more limited. With hardly any permanent staff, wage tax gains will be practically non-existent. But the company emphasizes that its new location will nonetheless bring in visitors who otherwise might not be spending time, and money, in Philadelphia.

“It’s wonderful that dynamic, important companies like Rite Aid are making a choice to come to Philadelphia,” Mayor Jim Kenney said. “It’s not that they are stuck here. They are making a choice to come to the city and invest their hard-earned dollars. That shows we are very much on the upswing.”

When Rite Aid first announced in 2021 that it would be opening a remote headquarters in Philadelphia, the company promised a number of other regional hubs where employees could gather and collaborate closer to home. But after one attempt in Kansas City, which few workers utilized, Donigan foreclosed on that idea.

The Navy Yard location and a technology center in Raleigh, N.C., will be Rite Aid’s only back-office physical footprint. The company also operates 2,350 retail pharmacies in 17 states, and employs 53,000 workers.

Some industry observers say Rite Aid’s move could be a sign of things to come for the larger office market, especially in the corporate sector.

“All these firms are trying to manage the reality of remote work with the demand for collaboration,” said Bruce Katz, founder of the Nowak Metro Finance Lab at Drexel University. “This is emblematic of the moment. You are going to see a lot more of this.”