Tracing the Path of Amazon’s 100 Million-Square-Foot Journey to Real Estate Dominance


By Clare Kennedy, Jacquelyn Ryan, Rohit Diwadkar and Jelena Schulz

In the year of the pandemic, one company was building and expanding more than most, with deals involving the hottest commercial real estate sector in the country. Seattle-based e-commerce giant Amazon more than doubled the size of its space as many other retailers were struggling.

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Across the United States, Amazon leased up properties last year as varied as a 90,000-square-foot warehouse for a last-mile packing station and a 1 million-square-foot warehouse with parking spaces for almost 200 semitrucks. The company’s already intense effort to dominate e-commerce became an all-out race for the logistics and warehousing space that supports the intricate delivery systems demanded by a surge in online shopping.

Amazon hoovered up at least 100 million square feet all over the United States in 2020 and is looking toward even more expansion this year as it seeks the ability to deliver to every American shopper within 24 hours. The retailer is already the nation’s most active industrial tenant, signing 19 leases in the first quarter totaling over 8.4 million square feet alone, according to CoStar data.

But it would be a mistake for landlords and developers to think that its insatiable appetite for industrial stock has made the company less choosy.

“They know exactly what they want,” Mike Yungerman, senior vice president and general manager of Opus Group’s development arm, told CoStar News. Yungerman oversees Opus’ active projects in Wisconsin, Michigan and the greater Chicago area.

Efficient square footage, plenty of parking, a lot of truck-loading space and access to large amounts of power are on the checklist of must-haves for Amazon before it will even consider leasing an industrial property.

However, the notoriously secretive company is often reluctant to disclose precisely where it is expanding, even if dirt is already turning. CoStar News has mapped out Amazon’s 2020 leasing spree, using its own data and as many verifiable reports as it could find. The map is not comprehensive, and may be incomplete, but it helps to paint a compelling picture of the magnitude of Amazon’s recent growth.

To find out what Amazon looks for in its real estate, CoStar News interviewed brokers and developers who have done business with the company. Here are five must-haves for landing a lease with Amazon, along with many of the properties Amazon moved into last year.

Smaller Spaces

It’s true that smaller properties are increasingly on the table, but only if they have the right specifications. Over the past couple of years, Amazon has shifted away from megadistribution centers, the kind that have 1 million square feet and a mezzanine.

As Amazon’s logistics network penetrates deeper into the largest U.S. cities, the company is gravitating toward smaller buildings tucked into densely populated areas such as the Northeastern United States that serve as the final waystation for goods flowing through Amazon’s vast delivery system.

In contrast to Amazon’s mammoth distribution hubs in the suburbs, these pick-and-pack buildings are usually about 100,000 to 200,000 square feet. These properties don’t have to be big, so long as they are within easy range of lots of people and can accommodate a fast and furious flow of goods.

The retailer’s lease for the 90,000 square-foot warehouse at 2300 Linden Blvd. in Brooklyn, New York, puts it within three miles of 660,000 people.

“They basically serve as throughputs. Nothing sits on the shelf for long,” Yungerman said.

Amazon’s evolving model does give owners of modest, older properties a shot, if they are located close to many customers and well connected to transit networks.

Ample Parking

That said, never underestimate the importance of parking and traffic management, particularly in high-growth areas such as the South. Parking is a big deal for Amazon, according to Steve Buss, who established his own real estate investment firm, Likewise Partners, in August 2020 after 30 years as a broker. Most recently, he served as lead for the capital markets team at brokerage JLL’s local office.

The company needs lots of parking, along with city ordinances, that allow intensive, 24-hour use, he noted. “If you can’t accommodate overnight truck and van parking, you don’t have a shot at it,” Buss said.

Consider The Cubes at Bridgeport in Newnan, Georgia, a 1 million-square-foot warehouse built in 2019 by Clayco’s real estate investment arm, CRG. The Cubes comes with 183 parking stalls for semitrucks, though the site could be further built out to accommodate 327. For mere passenger vehicles, the development has a lot with 427 spaces, and that too could be expanded to up to 755.

For those who have a parking lot that doesn’t match Amazon’s specifications, there are sometimes ways to beef it up without much effort or expense. Some landlords have reeled in leases with Amazon by partnering up with owners of vacant land or an underutilized parking lot next to a would-be site, Buss said.

Amazon also has a taste for relatively small buildings that punch above their weight when it comes to vehicle storage.

One example, a 106,000-square-foot building in Clearwater, Florida, has a 531-stall parking lot. The ratio of about five stalls per 1,000 square feet of indoor space far exceeds many larger industrial sites, which commonly have a ratio of 1 stall per 1,000 square feet and sometimes less.

Parking is one thing, but traffic flow is also very important to Amazon. The company is also looking for a site configuration that facilitates smooth circulation and roadways that do not become congested, particularly in rapidly growing areas such as Dallas-Fort Worth.

“They have very strict requirements about having separate access points for smaller vehicles and semitrailers. They don’t want them using the same entrances and exits,” Yungerman said. “If your site has cars and trucks using the same driveway, that would be a no-go.”

The property at 2601 S. Airfield Drive in Dallas, for instance, has segregated driving lanes for trucks, according to marketing materials.

Dock Density

Dock space, or a part of the building where products are loaded and unloaded from trucks, is a big deal. Amazon is a high-volume operator, and the need to get products in and out is paramount. The company’s influence has altered the standard specifications for warehouse properties, Buss said. Not long ago, logistics and warehouse properties needed one dock per 10,000 square feet, Buss said. That figure has shrunk to one per 7,500 or even one per 5,000 square feet.

Most of Amazon’s new leases in California, which is the nation’s most populous state and home to some of the world’s largest ports, come with dock densities well under the old one-per-10,000 square feet standard.

One stand-out property in the Golden State is 300 Boone Drive in the Napa Logistics Park in a city called American Canyon. The almost 202,000-square-foot building, now under construction, will have 168 docks once done, which would give it a dock density of one per every 1,202 square feet.

Power Hungry

Electrical infrastructure can make or break a deal, even in its home turf of the Pacific Northwest where it has been growing for years. Power requirements for buildings leased by Amazon over 2020 generally exceeded 1,000 amperes, a unit of measurement that describes the amount of electrical current flowing at a given time. To put this in perspective, consider this: A typical single-family home in the U.S. requires about 200 amps.

A common capacity among Amazon-leased properties was similar to that of the IAC Commerce Center SeaTac in Des Moines, Washington, which has about 3,000 amps.

“Power requirements are really important. More users have heavier power requirements now,” Yungerman said. “The sophisticated equipment they use just pulls a lot of power.”

Many often do have even higher loads, however. One of the most-juiced Amazon properties surveyed by CoStar is in the Midwest at 33600 Mound Road in Sterling Heights, Michigan. The almost 570,000-square-foot building is capable of drawing up to 8,000 amps.

Right Place, Right Time

Timing is everything for Amazon.

“They are very quick to make decisions, so if your site isn’t ready right then they will move on,” Yungerman said.

On the other hand, if you miss them in one round you probably will get another chance because they’re expanding at such a rapid clip, Yungerman said. The company's influence has also sparked a run on industrial properties from competitors such as Home Depot, furniture sellers, and other retailers trying to pivot to a model that allows digital orders, which means owners of industrial properties will have plenty of suitors for the foreseeable future.

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