Two Amazon Warehouse Properties Traded in Deals Totaling $718M

Two properties that are home to two of Amazon’s largest fulfillment centers have been sold in separate deals totaling more than $718 million.

Macquarie Asset Management’s U.S. Core/Core-Plus Real Estate unit has completed the acquisition of a property in Newport, DE that includes Amazon’s largest fulfillment center, a 3.7-million SF robotic facility that the e-commerce giant opened in September on the site of a former GM auto plant. 

According to a report in the Philadelphia Business Journal, the purchase price for the Newport property was $392 million. 

This week’s deal in Delaware closed less than a week after Virginia-based Capital Square purchased a 167-acre site in Bondurant, IA that includes Amazon’s AR Sort Fulfillment Center for $326.2 million. Polk County officials said they believe the sale price is the highest ever recorded in the county.

Investors typically are willing to pay more for a property with a long-term lease in place. Amazon, which opened its 2.69 million SF fulfillment center in Polk County at the end of 2020, has a 20-year lease on the facility. 

Macquarie is part of an Australian financial conglomerate with holdings that include Lincoln National Insurance. Last year, Macquarie’s U.S. real estate team acquired Brandon Woods III, a logistics portfolio in Baltimore’s Anne Arundel County with two warehouse buildings totaling 840,000 SF and 50 acres of developable land.

In the last 90 days, Macquarie Asset Management’s U.S. Core/Core-Plus Real Estate team has also acquired 375 Broadway, a fully-leased mixed-use building in New York City’s SoHo neighborhood, and fully-leased office buildings in Phoenix, AZ and Seattle, WA.

Earlier this month, Amazon CFO Brian Olsavsky said in a Q4 earnings call that Amazon would start “moderating” it’s purchases of industrial properties and leasing activities. Amazon spent an estimated $25.4 billion on leased property and $5.8 billion on build-to-suit development of fulfillment centers in 2021. 

Amazon fueled the rise of industrial warehouses as an institutional investment asset class during the past two years by leasing millions of square feet in industrial warehouses and gobbling up industrial properties in cash purchases for use as distribution centers.

Amazon led a binge that saw the 25 largest U.S. retailers acquire 38 million SF of rentable space in industrial properties in 2020, up from 18.8 million SF in 2019. The spending spree lifted industrial sector property values by 39 percent between October 2020 and October 2021.