Starting about three years ago, the Seattle-based colossus quietly began searching for property in key US markets such as Southern California, Texas, Illinois, Florida and the Bay Area.
, but it also purchases bare land, of which the company acquired about 4,000 acres in the same period, says real estate researcher CoStar Group Inc.
“Like all companies, we’re adapting to the availability of real estate and location of our customer demand, and we’re also constantly evaluating our approach based on our financials,” spokesperson Kelly Nantel said in a statement. A Metro Green Line station overlooks a 2 1/2-year-old Amazon distribution warehouse and an Uber Greenligh office at the west corner of a North Tech District parcel originally designated as the future site of 685 homes. The city scaled back that plan after state officials complained there was no evidence existing uses would leave to make way for new homes by 2030.
Amazon’s new “last-mile” delivery station, which opened this year at in the 500 block of Dyer Rd. in Santa Ana. Research by the Teamsters and logistics consultant MWPVL International show Amazon is leasing 96,400 square feet in the warehouse, built in 1954 for U.S. Rubber Co. and last occupied by Royalty Carpet Mills.
A 170,692-square-foot warehouse in La Palma recently leased by apparel company Americhine. Company officials said they need to ramp up their e-commerce operations because of increased online sales during the pandemic. “There’s going to be something on the other side of all of this investment for the consumer,” said John Blackledge, an analyst at Cowen and Co. “People will buy more on Amazon when they see they can get it in five hours instead of in two days.
Bezos’ aversion to buying property confounded some Amazon real estate executives, especially as the company matured and its needs shifted, according to people familiar with the matter, who requested anonymity to discuss an internal matter. Retail competitors like Walmart own most of their US stores, giving them more control and assets that appreciate.
Amazon had to cram more products into smaller urban lots, requiring it to build more specialized and expensive taller buildings. Industrial property in the shadow of big cities is increasingly scarce and desired by a jostling pack of players, from distribution companies like United Parcel Service Inc. and FedEx Corp. to grocers, restaurant chains and car dealerships. The vacancy rate for industrial space is at an all-time low of 3.
Amazon’s new “last-mile” delivery station, which opened this year at 515 E. Dyer Rd. in Santa Ana. Research by the Teamsters and logistics consultant MWPVL International show Amazon is leasing 96,400 square feet in the warehouse, built in 1954 for U.S. Rubber Co. and last occupied by Royalty Carpet Mills. Amazon estimated 235 full-time employees will work at the site, a city official said.
Amazon will still pay developers to oversee warehouse construction, but for a paltry fee in the $5 million range compared with profits of up to $50 million they made by converting vacant land into a brand new facility with Amazon as a tenant, according to people familiar with the matter. The question now is how Amazon will adapt a boom-era strategy to current economic conditions. Online sales growth is slowing, interest rates are rising, and some analysts expect a recession in the coming months.
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