Amazon Listing More Of Its Big, New Warehouses For Sublease
Amazon is once again accelerating its push to shrink its enormous U.S. warehouse footprint, but this time it is looking to shed some of its newest fulfillment centers, according to a new analysis.
Amazon placed more industrial space on the market for sublease in October than it has in any single month since September 2022, a CoStar analysis found. Most of those newly listed spaces are in newer buildings and are being offered with subleases expiring in 2030 and beyond.
Amazon placed a 1.1M SF facility in Atlanta on the sublease market with an expiration of 2037, listed a 350K SF property in San Antonio through 2031, and is offering a 219K SF warehouse in Fort Worth through 2036, CoStar reported.
“All three of these spaces are in properties built during the pandemic that the e-commerce giant first leased between mid-2020 and mid-2022,” Adrian Ponsen, CoStar’s national director for industrial market analysis, wrote in the report.
The sublease moves are a continuation of Amazon's plan to cull some of the distribution space it amassed during the pandemic, when Amazon became the biggest customer in industrial real estate.
Last May, Bloomberg reported that Amazon planned to sublet at least 10M SF in several markets, including New York, New Jersey, Atlanta and Southern California, much of which was to consist of Amazon’s older facilities.
Amazon appears to have made good on that, and then some. Over the past 16 months, Amazon listed more than 14M SF of distribution space for sublease across the U.S., or about 3% of the retailer’s logistics footprint, according to CoStar.
Overall, Amazon’s logistics footprint has remained flat this year, as it leased 6.9M SF versus either vacating or offering for sublease some 6.7M SF, CoStar reported.
Even for spaces it isn't offering to sublease, it is looking to push back openings to reduce its costs.
This month, Amazon pushed back the opening of a largely completed, 1M SF distribution center in Homestead, Florida, for a year due to “various macroeconomic issues such as industry-wide supply chain challenges and inflationary pressures,” Bisnow reported.
Amazon's pullback mirrors the broader diminishing demand for industrial space nationwide. Industrial real estate values dropped 9% between September and October, according to Green Street. In the third quarter alone, 162M SF of industrial space was completed nationwide at a pre-leased rate short of 33%, according to JLL.
