E-commerce giant Amazon inks huge lease in West Valley
Amazon.com Inc. has signed another massive industrial lease in metro Phoenix, adding to its substantial portfolio in the Valley.
Amazon (Nasdaq: AMZN) will fully lease a 1.2 million-square-foot building for 10 years at The Cubes at Glendale industrial park, according to a new Cushman & Wakefield listing that markets the building for an acquisition opportunity.
The e-commerce giant will occupy building B of the industrial project, located at 15301 W. Northern Ave., which was developed by Chicago-based CRG in an industrial hotbed with major employers including Nestle, Red Bull, White Claw and Walmart.
Amazon was not immediately available for comment about its lease. CRG declined to comment for this story.
The Cubes houses other major tenants including Williams-Sonoma Inc.’s 1.2 million-square-foot facility, a U.S. Merchant manufacturing plant and Saddle Creek Logistic’s warehouse. At full buildout, the Cubes industrial project is expected to total 5.5 million square feet. Four buildings have been developed on the site so far.
A JLL team made up of Bill Honsaker, John Lydon and Kelly Royle are the leasing brokers for The Cubes at Glendale Project. JLL declined to comment.
Amazon was represented by Mike Freret, a market leader for KBC Advisors in Phoenix. Freret could not immediately be reached for comment.
The sales team at Cushman & Wakefield advising on the potential sale of the Amazon-leased building in Glendale includes Will Strong, Kirk Kuller, Michael Matchett, Molly Hunt and Dean Wiley, according to the listing.
Lease is one of Amazon’s biggest recent moves in the Valley
Amazon’s lease is one of its largest in the Valley in recent years. The retailer has continued to expand its footprint in Arizona despite the company’s strategy to sublease millions of square feet of warehouse space as e-commerce business slowed in 2022.
In 2023, Amazon opened its newest Phoenix-area facility in Mesa for a 1.2 million-square-foot storage and distribution center, the largest of its kind in the U.S. It was expected to employ at least 800 people and increase to 1,300 during peak seasons.
Amazon is also looking to start construction on two separate data center projects in Mesa for a pair of 465,451-square-foot buildings.
In total, Amazon has 17 fulfillment and sortation centers in Arizona and 13 delivery stations. The company employs more than 33,000 full- and part-time employees in the state, the Phoenix Business Journal reported in 2023.
The Amazon deal also marks the largest known industrial lease signed in metro Phoenix since 2022, a record year for industrial leasing in the Valley.
Industrial absorption slowed significantly last year after reaching 27 million square feet in 2022, which saw major leases such as a 1.2 million square-foot lease from Lowe’s at The Cubes at Mesa Gateway and Amazon’s 1.1 million-square-foot lease at Elliot 202 in Mesa.
Leasing of buildings totaling 1 million or more square feet dropped off in 2023 while tenants looking for spaces 250,000 square feet or less drove a lot of the leasing last year. The largest lease signed last year was Cubework.com Inc. for 915,160 square feet followed by Saddle Creek Logistics Services for 570,080 square feet.
Although leasing for larger spaces slowed, demand from tenants is still driving high levels of construction across the Valley. About 40 million square feet of industrial inventory was under construction in Q4 after record levels of supply delivered last year.
Activity in some markets have slowed because of high interest rates and companies pausing expansion plans, but the Phoenix area is still seeing leasing and construction numbers that are above pre-Covid levels because of its population growth, companies relocating out of California and the substantial manufacturing growth in the region.