October 23, 2020
Amazon’s expansion over the course of the pandemic has been well documented on Connect Media and elsewhere, with new reports of yet another large-scale fulfillment center in development for the e-commerce giant sometimes occurring more than once a week. Less noticed is the positive impact that expansiveness has had for property sectors outside industrial.
“With the pandemic exacerbating the challenges facing the retail segment, it is now becoming harder to fill empty storefronts, which means mall owners must be creative in their use of existing space to adapt to a rapidly changing landscape,” writes Trepp’s Hayley Collier. Enter Amazon, which reportedly has been having discussions with Simon Property Group on backfilling vacant department-store spaces with distribution hubs.
Another sector that has been hit hard by the pandemic, albeit not quite as forcefully as retail, is office. “With work-from-home being the way forward for some tech companies, Amazon has gone in the opposite direction,” Collier writes.
She cites Amazon’s recently announced plans to expand its physical offices in six different U.S. cities, adding thousands of corporate jobs to boot. Connect Media reported in August that these new offices will host teams supporting businesses across the company including AWS, Alexa, Amazon Advertising, Amazon Fashion, OpsTech and Amazon Fresh, among others.
“The move to add 900,000 square feet of office space and an additional 3,500 corporate jobs may just be the savior for some involved in the industry,” writes Collier. The plans include expansions in New York, Phoenix, San Diego, Denver, Detroit and Dallas.
Even lodging property owners are getting in on the act, albeit indirectly. “We recently wrote about another, arguably more surprising Amazon venture in TreppWire, our daily client newsletter,” Collier writes. Namely, Amazon acquired a Residence Inn hotel in Pentagon City, VA.
The hotel, representing the largest asset behind a $415-million portfolio CMBS loan, was purchased by Amazon subsidiary Acorn Development from the Blackstone Group. The plan is to tear down the building and utilize it as part of Amazon’s 2.1-million-square-foot HQ2 campus.
Pictured: Galleria Towers in Dallas, one of six locations nationally where Amazon is expanding office space.
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