Industrial real estate experts say the push by Amazon, WalMart and others to get online product orders to customers fast means more e-commerce buildings will pop up, and suppliers will follow in their tracks.
“The Amazon effect is just barely starting to come here,” said DCT Industrial Senior Vice President Mark Bowen, who has watched Amazon grow in the retailer’s home city of Seattle and in Phoenix, where Amazon occupies 4.5 million sf of industrial space.
“It was amazing,” said Bowen. “Once they hit the market with space requirements, it really kind of ballooned.”
“This is ground zero for Amazon and Wal-Mart going at each other,” Brad Calbert, president of Colliers International’s Denver office, added at a recent capital markets conference in Aurora.
Amazon’s fulfillment center is just getting off the ground at 22205 E. 19th Ave. in Prologis Park 70 in Aurora and should be completed before the holiday season, according to Wayne Barrett, Prologis vice president and Denver market officer. It will be the second largest warehouse in the Denver area, behind the 1.3 million sf Kmart distribution center in Brighton. It also will be the most expensive.
How Wal-Mart’s plans near Denver International Airport stack up remains to be seen. Wal-Mart has 169 acres at Porteos but won’t divulge its plans and hasn’t submitted an application to the city. There are rumors that a third big online retailer has eyes on the region as well.
Amazon entered the Denver market with a 452,400-sf sortation center that opened at Majestic Commercenter last year. The new fulfillment center will provide faster Amazon Prime service on a wider variety of inventory, according to spokeswoman Ashley Robinson.
Although Amazon doesn’t comment on future plans, it is said to be looking for more industrial space in the metro area, as well as a big chunk of downtown Denver office space.
Its fulfillment centers typically are the hub in a distribution chain that also includes smaller warehouses. “You’ve got to think there probably are a couple more 300,000- to 400,000-footers planned for somewhere up and down the Front Range,” said Bowen.
Amazon and online competitors likely will spur growth of companies that make boxes and packaging, for instance. Although Amazon is rolling out its own delivery service in major cities including Los Angeles, Seattle, Dallas and Chicago, its facilities typically have been good news for delivery services including FedEx, UPS and DHL. “We utilize a variety of great carriers and expect to continue to do so,” Robinson said.
Amazon’s Aurora fulfillment center will employ 1,000 people full time. The company will lease the building from a Prologis affiliate.
Cushman & Wakefield brokers Alec Rhodes, Tyler Smith and Aaron Valdez represented Amazon in the deal. They declined to comment on the transaction.