What to expect when Amazon opens a big hub?

Question

Hello!

New member here!

What can we expect with the surrounding real estate market when Amazon builds a brand new distribution center?

Amazon just built a giant building, but the area isn't the best.

I wouldnt typically seek opportunity there, but is this a gamechanger?

Thanks in advance everyone!

Mike

James Carlson · Answer

@Michael Greer

I think Michael's response above hints at something. My gut says an Amazon can add fuel to a fire, but doesn't create fire out of nothing. What I mean is that if you have a city that is already growing a bit or has the desire to grow, then I think it can help.

Colorado Springs where we work has a new distribution center on the south side of town by the airport. Our city is already growing like crazy, a mix of natural influx to Colorado, some good local policies, and overflow from the more expensive Denver market to the north. So this is just more grease for the wheels of progress here. We already have a lot of growth on the southside of town. (Security-Widefield near Fort Carson had some of the biggest home value increases of anywhere in the state last year.) And the city is supplementing Amazon's impact by helping to develop the southern end of Academy road down in that area, so more businesses will come in.

Again, this is all to say, I think Amazon is obviously a boon for an area. (There are 2,500 or so employees at the Colorado Springs center.) But it can't create a thriving economy out of nothing.

Mike Schorah · Answer

I think it depends on the area. There are 2 areas close to me where Amazon distribution centers opened in the last 15 years.

Middletown, DE - This distribution center opened roughly 15 years ago and it has caused growth in the area to explode almost instantaneously. The area was very small and tripled in size in regards to number of stores and population. In the past 5 years, they even expanded the road to accommodate the explosion in traffic. I checked Google. The population went from 6,000 to 12,000 in a matter of a couple of years and now is at 21,000.

North East, MD - This distribution center opened roughly 5 years ago and growth is still stagnant. The area is very small and the local government discourages growth. Stores, population, and roadways have remained the same and aren't expecting to change. The population has been stagnant at 3,500 over the past 10 years.