Amazon Mulls $15B Industrial Expansion

As tariffs and threats of tariffs upend global markets, Amazon is preparing for big moves in the logistics sector.

The e-commerce giant is considering a $15 billion plan to expand its industrial real estate capabilities across the country, Bloomberg reported. The plan calls for the creation of roughly 80 logistics facilities that would reportedly consist of delivery hubs and multistory fulfillment centers.

Amazon is on the hunt for potential capital partners to help finance the plan. The company is allegedly soliciting proposals related to the developments.

The company would reportedly be willing to lease the facilities for 15 to 25 years and directly fund some of the sites.

“Meetings like this with our capital partners are routine and part of the normal due-diligence process, as we consider potential, future projects,” an Amazon spokesperson said.

Notably, the request for proposals went out ahead of Donald Trump’s tariff announcement a week ago. On Wednesday afternoon, the president largely rolled back those tariffs, with the exception of China.

Amazon’s industrial strategy has shifted several times in recent years. At the start of the pandemic, the company couldn’t seem to get enough industrial assets under its umbrella as e-commerce adoption boomed while physical stores shuttered.

By the end of 2022, however, Amazon recognized that it had gone too far, proceeding to close or postpone the opening of nearly 100 logistics facilities.

Last year, Amazon was firmly back in the industrial game, spending more than $2 billion on industrial acquisitions alone. These investments, however, seemed more focused on data and cloud storage. Amazon acquired more than 3,000 acres in 14 states and dumped money into opportunities to expand data center facilities to boost Amazon Web Services amid the artificial intelligence boom.

It may be a good time to invest in these types of industrial spaces. Supply that started being developed during the pandemic is coming online, but demand in the sector has softened significantly. In the fourth quarter, the country’s industrial vacancy rate jumped above 7 percent for the first time in a decade, according to JLL.

— Holden Walter-Warner