Amazon is paying $91 million for a warehouse and land near the Denver airport

Amazon.com has expanded its logistics force near Denver International Airport by purchasing a large warehouse and 13 acres for $91.1 million.

The Seattle-based e-commerce pioneer paid $86.1 million for Building 1, a 625,000-square-foot warehouse at DIA Logistics Park at 6300 North Powhaton Road in Aurora, 27 miles east of Denver, reports the Denver Business Journal.

At the same time, it paid $5 million for a vacant lot next door, southeast of East 64th Avenue and North Powhaton Road.

The sellers were subsidiaries of Indianapolis-based Ambrose Property Group and Phoenix-based A&C Properties.

The total price is $138 per square foot for the warehouse and $384,615 per acre for the land.

Built to spec last year, the 46-acre warehouse is part of Porteos, a 1,287-acre mixed-use commercial development near the airport, according to the Business Journal. The single-story building has 92 docks, 40-foot ceilings, 3,900 square feet of offices and parking for 288 cars and 176 large rig trailers.

It is part of the DIA Logistics Park, which consists of eight buildings on 226 acres within the Porteos Industrial Development, managed by Ambrose and The San Juan Company, based in Montrose. Costco Distribution Center and Cardinal Logistics warehouses are located nearby.

Amazon’s purchase expands its presence at the airport about 3 km away. According to the Aurora Economic Development Council, the company opened its first facility in Aurora in 2016 and later added several other warehouses throughout the city.

The deal comes amid a slump in the once-hot coast-to-coast warehouse market, which has started to cool in 2022 but could warm up thanks to Amazon’s push.

Net absorption of industrial properties across the U.S. fell year-over-year to 45.5 million square feet from 74.4 million square feet last summer, according to Savills’ second-quarter report.

Industrial vacancies nationwide rose 0.4 percent to 6.1 percent in the quarter ending in June, the lowest quarterly increase since the first quarter of last year, according to Cushman & Wakefield.

San Francisco-based Prologis, the nation’s largest industrial owner, reported an 18 percent decline in revenue to $2.01 billion, compared with $2.45 billion in the same period a year ago, according to its earnings call.

The industrial giant blamed rising warehouse vacancies on oversupply and weakening demand following the pandemic e-commerce boom. To transform the market, it focused on the demand for data centers and artificial intelligence.

Despite the cold weather in logistics, Amazon, one of the largest warehouse tenants in the country and considered a “first mover” in the industrial real estate market, resumed the expansion of its logistics footprint last spring, announcing gains for the industrial market.

According to Savills, Amazon’s U.S. facilities are expected to grow by 43 million square feet this year, compared with growth of just under 30 million square feet last year. In 2020 and 2021, as e-commerce sales surged, the company’s U.S. facilities grew by approximately 100 million square feet in both years.

— Dana Bartholomew

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