Amazon is Hungry for Office Space in SoCal
The e-commerce giant signs leases for 439K SF in Santa Monica, Irvine and San Diego, enlarging its footprint to 1.5M SF.
Amazon has been busy this month grabbing a big chunk of office space in Southern California, enlarging its overall office footprint in SoCal to 1.5M SF. The e-commerce giant recently signed leases for a combined 439K SF of office space in Santa Monica, Irvine and San Diego.
Amazon, which is building a mammoth second headquarters that has room to grow to 8M SF of office space at its HQ2 complex under construction in Arlington, VA, says it’s planning to add more than 2,500 corporate and tech jobs in Southern California.
This may sound like a contradiction based on the surprising news that came out of Amazon’s Q1 earnings call, when CFO Brian Olsavsky disclosed that Amazon had posted its first quarterly loss since 2015, losing nearly $4B in Q1 2022.
Olsavsky said Amazon had overextended itself by doubling the site of its distribution network during the pandemic while overestimating the growth of e-commerce, which started to slow down in the fourth quarter as consumers began moving back to bricks-and-mortar retail outlets.
Olsavsky notably said that Amazon had too much warehouse space and “too many people” during the earnings call, but he was not referring to the e-commerce platform’s overall workforce, just its warehouse workers.
In fact, the brightest unit in Amazon’s 1Q earnings report was Amazon Web Services, which is growing the tech support for its world-leading cloud services.
In announcing a 200K SF lease for space at the Water Garden in Santa Monica, Amazon said its expanding office footprint would further “the revitalization of the downtown area.” The Water Garden is owned by JPMorgan Asset Management and managed by CBRE.
Amazon said the expansion would bring more than 1,000 new jobs to Santa Monica.
Amazon added a 123K SF lease at The Collection at UTC in La Jolla, near its San Diego Tech Hub. Amazon will occupy the top two floors in the building, owned by Seritage Growth Properties and Invesco, and bring 700 new jobs to the location.
Amazon also secured a 116K SF lease for space in The Irvine Co.’s Spectrum Terrace, where it will be bringing 800 new jobs.
Despite its apparent glut of warehouse space, Amazon has given little indication that it intends to cull any part of its colossal distribution network, which is approaching 400M SF, including what is probably the largest single-tenant footprint for leased industrial space.
Several mega-warehouses Amazon is building in several locations across the country as robotic, first-mile distribution hubs may have delayed openings due to supply chain disruptions impacting construction.