Amazon buys 120 acres set for 3.4M sf distribution hub

Amazon has shown it can move fast for an 800-pound gorilla, going from doubling its real estate portfolio in a pandemic buying spree to declaring it has too much warehouse space and will put millions of square feet up for sublease.

Now it’s working on its long game, buying up about 120 acres of land in the Inland Empire for an industrial development that could be years in the making,

Amazon paid about $13.4 million to buy vacant land near Palm Springs, according to public property records filed with Riverside County. The seller is an industrial developer that filed plans with the City of Desert Hot Springs to build a 3.4 million-square-foot e-commerce distribution center.

In July, Atlanta-based Seefried Industrial Properties proposed to build a multi-story “warehouse and distribution center for consumer products” across 95 acres between 19th Avenue and 20th Avenue on the east side of Calle de Los Romos in Desert Ho

Amazon has hired Seefried in the past for build-to-suit projects across the country — the two have worked together since at least 2016, when the company hired Seerfired to develop a fulfillment center in Sacramento.

Though plans for the developments in Desert Hot Springs do not name Amazon as a tenant, city staff noted the county “is one of Amazon’s preferred areas for building distribution centers given its proximity to the major markets of Southern California,” according to a March report recommending the project move forward.

The company’s buy in the desert seems to run counter to its own recent announcements. In April, Amazon decided it had too much warehouse space, after a two-year binge to lease millions of square feet of distribution space across the U.S. The company is “no longer chasing physical or staffing capacity,” CEO Andy Jassy said in an earnings release then.

But Amazon wouldn’t be moving staff in any time soon. The warehouse will take years to develop and construct, meaning Amazon can plan for long-term expansion, rather than taking up any immediate space it can find.

Amazon’s decision to buy the land is also in line with its recent company strategy to own its own real estate, rather than lease, bypassing rising rents and yearly rate hikes. The company doubled its owned real estate portfolio in 2021, bringing it to 16.7 million square feet.

Amazon did not respond to a request for comment.