Amazon Scoops Up More Warehouse Space on Staten Island
By Keiko Morris
Amazon.com Inc. is expanding its warehouse operations in Staten
Island as the online retail giant pushes to speed delivery to its
New York-area consumers.
The company signed a lease to take 450,000 square feet of
warehouse space at Matrix Global Logistics Park, where it already
has a massive 855,000-square-foot fulfillment center, an Amazon
spokeswoman confirmed. The company plans to open a delivery station
in the new space for the last legs of the customer-order
The deal is the latest example of retailers ramping up their
distribution operations inside New York City even as they continue
to expand in New Jersey and surrounding areas to keep up with
growing online shopping. Big retail companies like Target Corp. and
Walmart Inc. are looking to drastically cut delivery times to
customers from two days to as short as two hours in some cases.
"There is a race to make sure that all online retailers have
hubs in which they are able to distribute throughout highly
populated dense areas, including New York City," said Ryan
McKinney, senior vice president at real-estate-services firm
Crain's New York Business earlier reported the Amazon lease
Competition for a very limited supply of warehouse space as
close as possible to New York City has pushed up rental prices and
cut vacancy rates to record levels in the main New Jersey market,
analysts have said.
Vacancy rates in New Jersey fell to 3.5% in the fourth quarter
of last year, compared to 3.7% in the previous year, Transwestern
said. Rental rates notched increases for 18 straight quarters at
the end of the past decade, the firm said.
The demand in areas where land is constrained has prompted
developers to embark on multistory warehouses with ramps for trucks
and vans to reach upper floors in cities including Seattle and New
York. Amazon and Home Depot Inc. signed leases last year for space
in Prologis Inc.'s Seattle multistory warehouse, the first modern
design of its kind in the U.S.
Two years ago, Amazon struck a deal with New York state for up
to $18 million in tax credits for jobs it creates at its existing
fulfillment center on Staten Island. The company doesn't typically
request government incentives for its delivery stations, an Amazon
The Staten Island warehouse complex is home to an IKEA facility
as well. Matrix Development Group, lead investor and developer of
the warehouse park, is building a fourth building that will be
975,000 square feet.
Last year, Amazon abandoned its plans to locate a second
headquarters in the Queens neighborhood of Long Island City after
facing a backlash over a state and city package of up to $3 billion
in financial incentives. Although the company pulled the plug on
that project, it said it would continue to add jobs in New York
Amazon's presence on Staten Island will likely bring its
competitors, Mr. McKinney said.
"It's a market where it is a follow-the-leader mentality," Mr.
McKinney said. "I would not be surprised if this trickled down to
competitors and other retailers that are maybe moving away from New
Write to Keiko Morris at Keiko.Morris@wsj.com
(END) Dow Jones Newswires
January 28, 2020 19:05 ET (00:05 GMT)
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