California is set to house Amazon’s largest warehouse yet, at nearly 4.1 million square feet.
Amazon has seen significant growth during the pandemic, with individuals turning to online shopping in record numbers. The company embarked on a massive hiring spree and also expanded its warehouse footprint. According Seattle weatherAmazon leased a property in the summer of 2021 and worked to turn it into a five-story, 97-foot-tall building with 4,055,890 square feet of space.
The expansion comes at a strange time for Amazon. Despite the record growth of the past two years, a return to normal has taken its toll on the e-commerce giant. The company recently reported its first quarterly loss in seven years, prompting it to rein in some of its expansion efforts, including expanding its warehouse footprint.
Multiple outlets have reported that the company wants to get rid of 10 million to 30 million square feet of warehouse space, though that doesn’t necessarily mean the Ontario location is one of those at risk. Having a single 4.1 million square foot warehouse could have significant advantages over multiple separate locations that cumulatively come in at a comparable size. It’s also likely that Amazon will have a hard time offloading the location, as not many companies could use such a massive property.
“I’m not sure they’ll be able to find another unique user for a space this size,” said Joshua Ohl, senior market analyst for real estate data firm CoStar Group. Seattle weather. “From what I’ve heard, Amazon has placed more of its older facilities on the sublease market that have less automation, less (high-level loading docks), and lower headroom clearances. “
The coming months should be interesting for Amazon, as well as for the retail and e-commerce markets in general. Some business leaders, such as JPMorgan’s Jamie Dimon and Tesla’s Elon Musk, are warning of major economic headwinds in the near future. If these predictions are true, it could spell trouble for Amazon, as well as its rivals.