Amazon signs third major metro Phoenix lease in 2024
Retail giant Amazon has moved forward with its third major industrial deal in metro Phoenix this year.
Amazon.com Inc. has fully leased a 1.2 million-square-foot warehouse in Goodyear called Prologis 303 Business Park, according to multiple sources with knowledge of the deal.
The Seattle-based e-commerce company (Nasdaq: AMZN) this month signed on for a decade at the building, which is located at the southwest corner of Cotton Lane and Camelback Road just west of the Loop 303.
The new deal brings the total amount of space that Amazon has leased in the Phoenix area so far this year to nearly 3.5 million square feet across three large buildings — all in the West Valley. Amazon previously leased 1.2 million square feet at the Cubes at Glendale project near Luke Air Force base and more than 1 million square feet at the Paloma Vista Logistics Center in Buckeye for a new in-bound cross dock facility in the city.
A spokesperson said Amazon does not comment on lease agreements in response to a Business Journal inquiry.
A leasing and marketing coordinator at Prologis, the developer of the $190 million Prologis 303 project, posted online April 5 that a full lease for the 1.2 million-square-foot building 1 in the park had closed, but did not identify the tenant.
Prologis declined to comment on the lease, citing a nondisclosure agreement.
The public post also recognized JLL — which represented the developer — and Mike Freret, for introducing the undisclosed tenant to the Prologis park. Freret is a market leader for KBC Advisors in Phoenix and has represented Amazon in the company’s recent leases.
Anthony Lydon, Marc Hertzberg, Riley Gilbert, John Lydon and Kelly Royle of JLL are the leasing brokers for the Prologis project. JLL declined to comment, and Freret did not respond to a request for information.
Each of Amazon’s new facilities could bring hundreds if not thousands of new jobs to this part of the Valley. The leases could also go a long way in pushing down the metro’s industrial vacancy rate, which has spiked in the past year following a record amount of new building deliveries.
About 31.6 million square feet of buildings were delivered in 2023 compared to 26.7 million square feet in 2022, according to Kidder Mathews research citing CoStar data.
Amazon’s Valley leasing spree also takes several major building footprints off the market amid concerns that leasing activity with tenants looking for 1 million square feet or more had significantly slowed since last year.
Experts say they’ve seen an increase in companies looking for big box warehouses in the first quarter of 2024, which had about 4.5 million square feet of net absorption, or the space leased minus what became vacant.
About 37 million square feet of space is still in the pipeline for construction, about 24 million square feet of which has not been leased yet. The vacancy in Q1 was 10%, according to Kidder Mathews.
Industrial rental rates in the Valley also increased to a new high of $1.15 per square foot triple-net in the first quarter, but this is expected to normalize because of new construction, Kidder Mathews found.