Amazon.com has expanded its logistics clout near Denver International Airport by buying a large warehouse and 13 acres for $91.1 million.
The Seattle-based e-commerce pioneer paid $86.1 million for Building 1, a 625,000-square-foot warehouse at DIA Logistics Park at 6300 North Powhaton Road, in Aurora, 17 miles east of Denver, the Denver Business Journal reported.
At the same time, it paid $5 million for a vacant parcel next door, southeast of East 64th Avenue and North Powhaton Road.
The sellers were affiliates of Indianapolis-based Ambrose Property Group and Phoenix-based A&C Properties.
The combined deal works out to $138 per square foot for the warehouse and $384,615 per acre for the dirt.
The warehouse, built on spec last year on 46 acres, is part of Porteos, a 1,287-acre commercial mixed-use development near the airport, according to the Business Journal. The one-story building has 92 docks, 40-foot ceilings, 3,900 square feet of offices and parking for 288 cars and 176 big-rig trailers.
It’s part of the DIA Logistics Park, which has eight buildings on 226 acres within the Porteos Industrial Development, managed by Ambrose and The San Juan Company, based in Montrose. Nearby warehouses include a Costco Distribution Center and Cardinal Logistics.
The Amazon purchase expands its presence by the airport, about 2 miles away. In 2016, the company opened its first facility in Aurora, then added a handful of other warehouses around the city, according to the Aurora Economic Development Council.
The transaction comes during a slump in a once-hot warehouse market from coast to coast, which began to cool in 2022, but may be warming from a boost by Amazon.
Net absorption for industrial property across the U.S. declined year-over-year to 45.5 million square feet, from 74.4 million last summer, according to a second quarter report from Savills.
Industrial vacancy across the nation rose 0.4 percent in the quarter ending in June to 6.1 percent, the lowest quarterly rise since the first quarter last year, according to Cushman & Wakefield.
San Francisco-based Prologis, the nation’s largest industrial landlord, reported an 18 percent drop in revenue to $2.01 billion, down from $2.45 billion in the same period a year ago, according to an earnings call.
The industrial giant blamed the decline on rising warehouse vacancies because of excess supply and a waning demand after the pandemic e-commerce boom. For a market turnaround, it set its sights on a demand for data centers and artificial intelligence.
Despite the logistics chill, Amazon, among the nation’s biggest occupiers of warehouses and considered a “first mover” in industrial real estate, restarted expansion of its logistics footprint last spring, foreshadowing gains for the industrial market.
Amazon’s U.S. facilities are projected to grow by 43 million square feet this year, up from growth of less than 30 million square feet last year, according to Savills. In 2020 and 2021, when e-commerce sales spiked, the company’s U.S. facilities grew by about 100 million square feet in both years.
— Dana Bartholomew
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