Amazon leases huge swaths of space in OKC
Amazon didn't wait around for its $80 million ,1- million-square-foot expansion — announced in March as the exploding coronavirus kept people home and shopping online — to keep expanding in Oklahoma City.
Same-day homed el ive ry, anticipated in the Oklahoma City metro area since Amazon's huge fulfillment center opened here last fall, could be closer by several hundred thousand square feet.
The digital retail giant moved into a leased 312,120- square-foot mega warehouse, nearly 20 years old but retrofitted, at 6801 S Air Depot Blvd., on June 1. It is comparable in size to the 300,000-square-foot sorting center Amazon has occupied at 1414 S Council Road since December 2017.
More recently, Amazon moved into a leased 120,000-square-foot property at 6101 SW 44, ordered goods' last stop before reaching consumers, on Sept. 21.
"This is in line with national trends: a higher demand from e-commerce tenants like Amazon f or small delivery stations near dense areas. This station is well located near the airport, highway, and on the edge of dense suburban areas in Capitol Hill," said Juan Arias, senior consultant for Washington, D.C.-based CoStar Group, a leading commercial property data analysis firm.
The two new leases give Amazon five industrial locations in Oklahoma City. The others are a 100,000-squarefoot space at 4401 E Hefner Road in Hefner Commerce Park, occupied since April 1,2018; the main 2,560,000- square-foot fulfillment center at 9201 S Portland Ave ., occupied since Aug. 27, 2019; and 1414 S Council.
The 1,080,030-square-foot expansion to the fulfillment center will be at 8991 S Portland Ave., just north of the original at 9201 S Portland. The city issued the building permit on Oct. 23.
The lease most significantly affecting the industrial property market is the S Air Depot mega warehouse, once part of the sprawling, 3.9-millionsquare-foot former General Motors factory.
That space has been on the multi-tenant bulk warehouse market and l eased by various tenants since GM closed in September 2007, said Bob Puckett, a broker and industrial property specialist with Price Edwards & Co. GM used it for just-in-time delivery of automotive interiors, he said. Now it's off the market.
"It is a true absorption of a competitive property ," Puckett said.
Most of the others were build-to-suit lease projects with space never offered to anyone but Amazon. The exception apparently was the most recent lease: CBRE
said in March 2019 that 120,000-square-foot 6101 SW 44 was on the market, before t he property was constructed, even as rumors persisted that Amazon was going to lease it. Amazon did lease it, after all.
Amazon' s boom continues, including upcoming seasonal hiring — 1,150 jobs in Oklahoma City and 650 in Tulsa. The company has opened five new fulfillment centers the past two weeks: two in Kansas and one each in Texas, Nebraska and North Dakota.
Ari as said Amazon is expanding its foot print in "key metros" Salt Lake City, Columbus, Detroit, Northern New Jersey, Daytona Beach, Los Angeles and Boston, in addition to Oklahoma City.
"Amazon is accelerating absorption of logistics space by increasing its distribution network by 50% this year," Arias said, an additional 60 million square feet of fulfillment space, "a record-breaking absorption figure."
Online retail is on a roll and taking Oklahoma City's warehouse market along for the ride.
"It is not just Amazon. Walmart has also increased its foot print with two leases totaling 112,000 square feet. Heading into 2021, the market is on solid footing with 1.2 million square feet of net absorption year to date, keeping the vacancy rate at 4.4%, compared to the last downturn when vacancies peaked at 7.4% in 2009," said Paul Hendershot, director of market analytics for Co Star Group in DallasFort Worth.