Amazon To Dispose Of Bay Area Office Space At Loss, Strategically Open News Facilities

Amazon.Com, Inc AMZN prepared to sell a vacant Bay Area office complex purchased 16 months ago as the firm went on a subleasing spree to reduce excess space amid the pandemic recovery-driven sales slowdown and macro headwinds.
Dermody Properties LLC, a commercial real estate developer based in Reno, Nevada, will buy the property and convert it into warehouse space, Bloomberg reports.
Amazon, in October 2021, paid $123 million for the 29-acre property in Milpitas, California, to tap real estate near big cities for use as new warehouses and facilitate future growth.
Amazon will likely book a loss on the sale of the Metro Corporate Center.
The Bay Area’s office market has been hit hard over the past two years as companies shifted to remote work to cut costs. Nearly one-fifth of the office market is vacant.
In 2022, Amazon suspended the construction of new warehouses in Spain until 2024.
Amazon abandoned many existing and planned facilities around the U.S. due to slow sales growth.
Amazon decided not to open 42 facilities spread across 25 million square feet of usable space and delayed opening an additional 21 locations, making up about 28 million square feet.
Amazon also planned to shut down delivery stations in Hanover and Essex, near Baltimore.
Amazon sought to sub-lease at least 10 million square feet of warehouse space.
In 2023, Amazon shared plans to close down three of its U.K. warehouses, likely to impact 1,200 employees.
Amazon continues to open new facilities, including warehouses in Omaha, Nebraska, and Sioux Falls, South Dakota but at a more measured pace than during the pandemic.
Recently, Amazon shared plans to slash over 18,000 jobs or 1% of total employees.
Price Action: AMZN shares traded lower by 0.27% at $98.95 premarket on the last check Friday.

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