Amazon Delays Opening Of Biggest Distribution Center In South Florida
Amazon is pushing back the opening of a 1M SF distribution center in Homestead, citing macroeconomic issues that it says have affected its entire warehouse network.
The Miami-Dade County Commission unanimously approved a resolution that grants the e-commerce giant a 12-month extension to open the distribution center at 13200 Southwest 272nd Ave. south of Miami.
Amazon has until September 2024 to open the facility, which will be its largest in South Florida.
The Seattle-based company, which has a market capitalization of roughly $1.5T, said it was requesting the delay because of “various macroeconomic issues such as industry-wide supply chain challenges and inflationary pressures,” according to the memorandum adopted by the commission on Nov. 7.
The development, which is projected to cost Amazon $129M, is largely finished. Amazon received a temporary certificate of occupancy in June 2022 for the distribution center, but it “has not yet been fully equipped with all the necessary equipment and furnishings to commence operations,” according to a memo from Edward Marquez, Miami-Dade County’s chief financial officer.
The equipment is expected to be installed by spring 2024, but Amazon sought the extension to September to avoid having to further amend its agreement with the county “in the event of unanticipated changes in the economy,” the memo says.
Amazon didn’t respond to Bisnow’s request for comment.
Amazon paid Miami-Dade County $22M for the 77-acre site in September 2020, the South Florida Business Journal reported at the time. As part of the sale, Amazon committed to investing at least $80M in the distribution center’s construction and pledged to create at least 325 jobs with an average salary of $32K.
The delay follows a broader step back from warehouse development and leasing from Amazon, which announced last September that it was closing or canceling plans for 44 facilities and delaying the opening of 25 sites across the country.
Among the buildings put on ice was a 250K SF warehouse lease in Coral Springs in Broward County that the e-commerce company instead opted to put up for sublease. Delivery centers in Miramar and Riviera Beach were also delayed.
The pace of e-commerce growth has slowed from pandemic-era highs and has failed to keep up with the growth seen before lockdowns pushed consumers online. Sales were up 7.5% annually through the second quarter of 2023, down from gains of more than 40% in 2021 and around 14% from 2015 to 2019, according to CoStar.
South Florida’s industrial market has also begun to normalize following years of rapid rent growth and development.
Industrial vacancy in Miami-Dade County ticked up to 2.4% at the end of the third quarter, and the region saw 319K SF in negative absorption. It was the first time absorption shifted into negative territory since the third quarter of 2021, driven in part by the delivery of more than 3M SF of new inventory this year.
South Florida is still expected to see significant industrial rent growth. Miami ranks fourth in the country for expected rent growth over the next four years, while Fort Lauderdale ranks first, according to CoStar.
