Historic Union Vote Looms Over Amazon’s Relentless Real Estate Growth

Tuesday marks the one-year anniversary of the JFK8 walkout, when hundreds of Amazon workers walked out of the company’s 855K SF Staten Island distribution facility — named after a president who signed a landmark collective bargaining executive order — to protest the working conditions there after seven of their colleagues contracted Covid-19 during the worst of the coronavirus pandemic’s assault on New York City. 

The workers claimed the company wasn’t being transparent about the number of cases inside the warehouse and that it didn’t take proper safety precautions. They demanded 100% paid sick leave and a plan on how the company would address the virus moving forward. The walkout set off an unprecedented labor movement at Amazon warehouses around the country, one whose reckoning is coming to a head this week.

Amazon’s more-than-a-million-strong workforce sits at a precipice as a warehouse in Bessemer, Alabama, is finalizing whether to become the company’s first unionized U.S. facility, with the final votes coming in Monday. All the while, their employer continues to expand at an extraordinary rate, leading a wave of commercial real estate investment and development that is changing the fabric of neighborhoods across the country.

But even if the vote is successful and more Amazon warehouses begin to unionize, industrial real estate experts don’t believe it would stagnate Amazon’s rapid expansion or the industrial real estate boom. 

“Amazon is a super-powered jet,” said Geoffrey Kasselman, partner and senior vice president of workplace strategy at the real estate investment and development firm CRG. “It is certainly not going to slow them down at all in the scheme of things.” 

Nevertheless, if the Bessemer warehouse unionizes, it will be one of the biggest victories for organized labor in a century, and labor experts said they believe it would only build on the national momentum warehouse workers have generated over the past year, starting with the JFK8 walkout.

"They are trying to organize in an extraordinary context, and they are doing it in a state that does not respect workers' rights to organize. They are fighting a really challenging but important fight,” National Employment Law Project Worker Power Program Director Anastasia Christman told Bisnow. "I am hopeful about the election and that the election would have been found to be free and fair, and I am hopeful that workers elsewhere will ask the question too."

The onset of the health crisis in the U.S. was a watershed moment for Amazon and the industrial real estate sector, as suddenly millions of American consumers were forced to turn to online retail. While Amazon’s profits grew 84% year-over-year in 2020, it expanded its real estate footprint by 50%.

It was the No. 1 tenant driving a year of heavy growth across industrial real estate, which saw 223.5M SF of warehouse space leased throughout 2020, according to CBRE, an 11.8% year-over-year increase. While the worth of retail properties dropped 13% last year, demand from Amazon and its competitors drove values for industrial properties to rise 6% on average in 2020, according to MSCI’s real estate value index.

The past year has been a turning point for Amazon’s workers, too. The Staten Island workers kicked off a labor mobilization effort inside warehouses nationwide. As the pandemic’s epicenter moved across the United States, workers in Illinois, Minnesota and California walked out in protest, claiming they weren’t able to socially distance properly and sanitation guidelines weren’t being followed, resulting in infections.

Amazon has stated that it has followed Centers for Disease Control and Prevention guidelines, provided sick leave and issued personal protective equipment to workers. 

Some Amazon employees are taking the company to court, and last month, New York Attorney General Letitia James joined them, filing suit accusing Amazon of failing to protect workers during the pandemic and retaliating against employees who tried to organize. 

“While Amazon and its CEO made billions during this crisis, hardworking employees were forced to endure unsafe conditions and were retaliated against for rightfully voicing these concerns,” James said in a statement when her office filed the suit. “The workers who have powered this country and kept it going during the pandemic are the very workers who continue to be treated the worst.” 

In response to James' suit, an Amazon spokesperson said in a written statement, "We don’t believe the Attorney General’s filing presents an accurate picture of Amazon’s industry-leading response to the pandemic.” 

Many Amazon workers filed complaints with federal agencies, saying their safety was being neglected and asking for the company to be held accountable.

In December, The National Labor Relations Board found that Gerald Bryson and Chris Smalls, JFK8 workers who led the walkouts, were retaliated against when they were fired after the action, Vice reported. The NLRB also found Amazon illegally threatened worker Jonathan Bailey, who was involved in the protest at a Queens warehouse in March of last year, Vice reported last week. Amazon reached a settlement in that case, while its trial in the Bryson suit is expected to take place this week.

“While we disagree with allegations made in the [Bailey] case, we are pleased to put this matter behind us,” Amazon spokesperson Leah Seay said in a written statement. “The health and safety of our employees is our top priority and we are proud to provide inclusive environments, where employees can excel without fear of retaliation, intimidation or harassment.”

While Amazon has been the most powerful force driving real estate’s best-performing asset class over the last year, it has also become a symbol of the socioeconomic disparities that the health crisis has turned from a gap into chasm.

“It has, in part, been part of what has compelled us to think about what essential work is and why so much of the work that keeps America humming is underpaid, unsafe and in many cases depends on the exploitation of workers of color and women workers,” Christman said. 

A year after the walkout, the prospect of unionization is closer than ever. Around 5,800 workers in the Bessemer warehouse, called BHM1, are currently voting on whether to unionize and become part of the Retail, Wholesale and Department Store Union. It is the first vote of its kind after years of efforts by Amazon to quell unionization mobilization in their workplaces. 

President Joe Biden threw his support behind the movement, noting the significance of the pandemic, health crisis and social crisis in the decision to unionize. 

"I have long said America wasn’t built by Wall Street. It was built by the middle class, and unions built the middle class," Biden said in his video supporting the unionization efforts. "Unions put power in the hands of the workers, they level the playing field, they give you a stronger voice."

Amazon has said previously it doesn’t think that the majority of its employees want to unionize. 

“RWDSU membership has been declining for the last two decades,” an Amazon spokesperson said in a statement to Bisnow. “Our employees know the truth — starting wages of $15 or more, health care from day one, and a safe and inclusive workplace. We encourage all of our employees to vote.”

Right now, Kasselman and others in the real estate industry say unionization is not likely to change the trajectory of growth for the industry, which is coming out of an unprecedented year of growth. It would only affect growth in a “nominal and one-off way,” he said. Amazon has found a way to “ferociously grow” despite any obstacle in its way, Kasselman said. 

“I just don’t see it becoming a dominant theme,” he said. “They can have an insatiable appetite for every type of real estate.” 

Real estate developers and brokers Bisnow interviewed for this story said the idea of labor efforts stalling distribution center growth isn’t a consideration. Amazon is set to grow 34% each year over the next five years, and so far nothing has been able to stop the company from expanding.

“From a landlord or developer perspective, this is not something that we’ve been discussing,” Stream Realty Partners Senior Director for Industrial Development Services Dale Todd said. 

Others say they can conceive of it having a trickle-down impact on its growth, even if it is minute. If the cost of labor is higher due to collective bargaining agreements, Amazon may be less likely to invest in secondary locations, some brokers said. 

“If the cost of doing business per person goes up, the bottom line shrinks,” B6 Real Estate Advisors partner and Vice Chairman Thomas Donovan said. “The opportunistic buys will definitely be adversely affected.” 

Still, even if Amazon’s bottom line is impacted, it is just one tenant in a booming industrial market, said TerraCRG Partner Dan Marks, a commercial leasing broker in Brooklyn. 

“Amazon is one very important part of the market and a major participant in the market, but there are others out there,” he said. “The market is more than Amazon.”

Kasselman also said that Amazon provides high wages — its average $15-per-hour wage is above the industry average of $12.90 — and good career trajectories. The focus of workers in Bessemer and those involved in protests nationally has been on conditions inside warehouses. Unionization could impact productivity to some extent, if that is what the union focuses on, Kasselman said.

“I just think that’s as far as the impact will go,” he said. 

The vote has already led to inquiries about unionization in other Amazon warehouses, NPR reports, and the ramifications of the vote have already spurred talks of unionization in industries beyond warehousing, Christman said. 

“We’re talking Bessemer and a few thousand people, but it’s a toe-hold,” Kasselman said. “Amazon moves markets. They are a market-maker and changer. If suddenly their entire workforce unionized, that would be unprecedented across the labor community, everywhere, for everybody in the supply chain industry.”