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Industrial Real Estate Investors Keeping a Close Eye on Amazon

Industrial Real Estate Investors Keeping a Close Eye on Amazon

Seattle-based Amazon has a whopping 39% share of online commerce, but its growth has plateaued in that sector, with one of the worst six-month stretches in the company’s history. Real estate firm Lee & Associates has released a report examining Amazon’s online-shopping stagnation and how it may affect industrial real estate.

Amazon has reported excess capacity that cost about $2 billion in “incremental costs” during the first quarter when the company reported a $3.8 billion net loss. Amazon is halting industrial leasing for 2022, and has subleased a 300,000-square-foot facility in the Bay Area. The company’s strategy has changed, and is now buying land to develop its own sites.

While Amazon’s online sales numbers have dwindled, the overall sector remains solid. The Census Bureau estimates that e-commerce sales in the second quarter of 2022 increased 2.7% from Q1 and 6.8% from a year ago. The report also indicates that despite Amazon’s changing strategy, industrial buildings remain in high demand, thanks to other companies like Walmart and FedEx. 

The industrial market may not be as explosive as it once was, but it remains strong as e-commerce is here to stay.


Inside The Story

Lee & Associates

About Mark Nieto

Mark comes to ConnectCRE with an extensive background as a business and news reporter in San Francisco radio, as well as 35 years as a traffic reporter on several stations including KGO, KNBR, KCBS and KFRC. As a business reporter, Mark covered the tech world in Silicon Valley where he became familiar with real estate transactions in the hot Bay Area marketplace. He attended San Jose State University with a BA in Radio and TV Broadcasting and currently resides in the Lake Tahoe area where he gets to frequently enjoy all of his favorite activities: Golfing, Fishing, Hiking and Skiing.

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