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04/06/2021

Amazon has converted as many as 25 malls into distribution centers

Al Urbanski
Real Estate Editor & Manager
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Amazon warehouse
Amazon goes shopping at malls - for warehouse space.

Amazon started buying up failed malls and turning them into warehouses and distribution centers long before the pandemic sent e-commerce purchasing sky-high.

Last summer, the mammoth online company began talking to Simon about installing mini-DCs inside some of its closed Sears and Penney’s stores. But, according to NBC News, Amazon has turned some 25 malls to fulfillment stations between 2016 and 2019.

In just the last four months, said the report, Amazon went on a shopping spree, getting approvals to install distribution centers at malls in Baton Rouge, Knoxville, Tenn., and Worcester, Mass.

Amazon took advantage of the falloff of business at malls during the pandemic to snare valuable space at a time when availability of industrial real estate is low and rental prices are high.

CBRE recently released a report saying that transaction volume in industrial spaces rose by 20% to 350 million sq. ft. and that warehouse floor capacity will remain limited and expensive for the next few years. More than half of the 190 million sq. ft. of industrial space now under construction in the top 22 markets, CBRE said, is already committed to lease.