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Amazon’s Warehouse Space Cuts Centered On Smaller Buildings In Secondary Markets

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Amazon has closed dozens of its distribution centers this year, with a focus on strategies to determine which buildings are profitable.

Nearly two-thirds of the 48 Amazon fulfillment centers statewide that other businesses can lease are 150K SF or less. by CoStar analysis The number of subleasing offers this year.

These listings are in addition to the millions of square feet of construction Amazon has postponed or canceled this year. According to CoStar, Amazon has a total of 7.8 million SF in the national subleasing market.

CoStar data shows that 13% of Amazon’s distribution space is in facilities over 1 million SFs, but none of the buildings are on the subleasing market. In contrast, 14% of its footprint is in buildings less than 50K SF, while accounting for 31% of subleased properties.

Marc Wulfraat, head of logistics consultancy MWPVL International, told CoStar that the company is likely trying to avoid inefficiencies, but remove small spaces that can be handled by larger locations nearby. Told.

Amazon is reportedly laying off about 10,000 people this week in an effort to cut costs. The layoffs come just before the holiday shopping season and will have a major impact on the people working on Amazon’s voice assistant Alexa, retail and human resources. The New York Times reports.

The adaptation of distribution centers has been underway for some time. 2021, Bissnow reported that it will move away from leasing space to become a developer-owner of its own logistics property. This summer it was revealed that he had purchased land to support his strategy. $2 billion in property acquisitions two years before that.

However, we are also correcting course after massive expansion during the pandemic. Said Bisnows Podcast of the month.

“They started opening buildings in 2020 and 2021, especially in the United States, at an almost absurd pace,” said Wulfraat. “There was a time when we were updating our database, we were looking at a map and thinking, ‘There’s something about this that doesn’t make sense. Place it right next to the station.”

He said Amazon is still on pace for an “impressive” year, but has exceeded its network expansion goals.

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