Amazon, Other E-Commerce Retailers Repurpose Dead Properties for Warehousing, Distribution

Researched by Industrial Info Resources (Sugar Land, Texas)--The ever-increasing distribution demands for the e-commerce industry are putting more pressure on commercial real estate markets. Where delivery times of five days or more once were common, consumers now are insisting on delivery times of no more than a day or two, with same-day delivery a major selling point. This is driving e-commerce retailers and package shippers to obtain more logistics capacity near urban population centers (also called the "last mile").

However, one limitation is the availability of suitable tracts of land for the construction of such facilities. The size of warehouses and distribution centers has risen to where buildings of 500,000 square feet or so are commonplace, and sizes nearing or even exceeding 1 million square feet are built with regularity; as a result, major urban centers, especially in the more densely packed Eastern U.S., often lack requisite land parcels. Instead of constructing new facilities on open plots of land, many companies are repurposing older facilities and reclaiming land once occupied by now-defunct retail developments.

Amazon.com Incorporated (NASDAQ:AMZN) (Seattle, Washington) is among those companies trying to secure distribution capability closer to urban areas. In Charlotte, North Carolina, Amazon is expanding a 397,000-square-foot, former DMSI (Charlotte, North Carolina) logistics center to 500,000 square feet and renovating it for distribution. For more information, see Industrial Info's project report.

Two projects are underway in Ohio, both reclaiming space occupied by former shopping malls: the Randall Park Mall in North Randall, and the Euclid Square Mall in Euclid, both on the outskirts of Cleveland. Each will have multiple stories and available space of up to 1.7 million square feet. For more information, see Industrial Info's project reports on the Randall and Euclid facilities.

Reclaiming old shopping malls may be catching on, as the FedEx Corporation (NYSE:FDX) (Memphis Tennessee) is building a 334,000-square-foot distribution center on the site of the former Big Town Mall in Mesquite, Texas. United Parcel Service Incorporated (NYSE:UPS) (Atlanta, Georgia) is planning to renovate a 475,000-square-foot facility in Maspeth, New York, once utilized by Duane Reade Incorporated (New York, New York). Together, these projects represent nearly $450 million in capital expenditures. For more information, see Industrial Info's project reports on the FedEx and UPS facilities.

As the consumers become more accustomed to the convenience of e-commerce, those companies that can deliver goods faster and more reliably will have a competitive advantage. Companies who want to obtain and keep market share will find themselves searching for more distribution capacity near the urban centers, where so many of their customers reside. As the space in these areas is already at a premium, repurposing land and facilities that have become unused may be a solution that saves space, time and resources, and removes outdated facilities from the urban landscape.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.