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What Amazon's warehousing scale-back could mean for Central Ohio

What Amazons Warehousing

Faced with its first quarterly loss in seven years, tech and e-commerce powerhouse Amazon is considering cost-cutting measures. But area experts say its presence in Central Ohio is unlikely to shrink.

Measures on the table include a pledge to scale back warehousing and distribution centers, with a target of subleasing a minimum of 10 million square feet of warehouse space,The Wall Street Journal recently reported.

The company says it has more warehouse space than it needs in some of its largest markets, such as New York, New Jersey, California and Atlanta, according to the Journal's May 23 report, and could end or renegotiate some of its leases.

Central Ohio is home to more than 10 Amazon facilities. In just its Rickenbacker and Etna sites alone, Amazon takes up about 2.3 million square feet of space. But local experts said they haven't heard anything about the giant slowing down here yet.

Amazon did not respond to request for comment from Columbus Business First.

Dan Wendorf, senior managing director at JLL, said he believes Amazon will keep its current footprint in the region because of the variety of sites and projects it has going on here, as well as the area's proximity to a large portion of the nation's population.

"You still look at the heart of Columbus and what it means for national logistics, we’re not single-purposed," Wendorf said. "I think there’s a healthy variety of what Columbus can mean for Amazon being located here."

Ben Struewing, vice president of leasing and development at Duke Realty — the official development partner of Rickenbacker International Airport's Global Logistics Park where Amazon has a 1.06-million-square-foot warehouse — said he believes certain cities will see scale-backs, but he is not aware of any space in Columbus that has been put up for sublease.

Were Amazon to sublease space locally, it could help some businesses on the hunt amid the tight industrial market. The region has experienced a continued string of record low industrial vacancy rates, culminating in a 1.6% rate for this year's first quarter, and industrial demand continues to soar.

Benjamin Johnson, executive vice president at Colliers Columbus, said that if Amazon were to sublease space it could be helpful, if the space was on the smaller side. While large speculative buildings are under construction, there is still an inventory shortage on smaller warehouses. Amazon has a handful of those in the region.

"They've taken down quite a bit of space in the last few yeas in all of the major industrial submarkets," Johnson said.

In addition to its local distribution and fulfillment centers, Amazon also has a large data center presence in Central Ohio, with new facilities set to begin construction this fall.


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Benjamin Johnson

Senior Executive VP | Principal | Columbus

Columbus

As a Senior Executive Vice President and Principal in the Colliers Columbus, Ohio office, I am the founder of Buckeye Industrial Group. Our team focuses on working on behalf of both local and national clients to execute creative solutions that maximize their bottom-line value. We hang our hat on operating with integrity and will not cut corners – if it needs to be done, we do it right the first time. We aim to leave clients happy and excited to partner with our team
again as we strive to consistently exceed expectations any way we can.

With over 14 years of commercial real estate brokerage experience and a previous career in commercial real estate finance, I specialize in advising clients in the leasing, acquisition, disposition, site selection and development of industrial real estate. Through my deep understanding of these processes, I continue to complete various assignments for clients and have been fortunate to broker the sale and lease of millions of square feet of industrial space and land. Additionally, I act as a consultant for clients at all phases of their commercial real estate transaction, including the early planning, investment, and development stages. Throughout my time with Colliers, I have enjoyed being involved in both local and national industrial real estate organizations, often serving in a leadership capacity.

Personally, I live in Upper Arlington with my wife and two boys. In addition to spending time with family, I keep busy by enjoying a wide array of hobbies including travel (I have traveled 30+ countries at last count), cooking, wine, exercise, sports, boating, water sports, scuba diving, snow skiing, camping, hunting, fishing, tailgating, home improvement projects, and anything else to stay busy and spend time with friends and family.

 

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