We are evaluating a purchase of ~30k square feet of warehouse space next to a new Amazon distribution center. Part of the space would be used by the owner/operator for his business (I am an investor in his business) and we would lease out the other space.
In general, would there be any obvious pros/cons to purchasing industrial space next to an Amazon warehouse?
One concern is that the warehouse was built for a single tenant, who subsequently bought out their lease and it has sat vacant for over a year. COVID may have been part of the reason for the vacancy, but also there seems to be a shortage of space in the 5000-50,000 ft space, so it’s a little curious that it’s still vacant.
We are doing a site visit today and wanted to hear what you think about investing near an Amazon facility.
I don't see any major pros, major con is going to be the traffic impact from the Amazon site. They will have a huge volume of trucks. You have to evaluate your purchase on the vacancy risk alone, IMO.
Agree there is not much upside to being adjacent to Amazon. Nevertheless, the fact that Amazon is there says a lot about the desirability of the location. The county I live in has 4 Amazon warehouses and industrial land is through the roof. Residents are fighting new industrial developments thereby raising the value of existing industrial buildings. If you can make it cashflow you won't regret buying it.