Amazon’s arrival in the Denver market signals the beginning of an e-commerce push into the metro area.
“We have known for a long time we’re going to see a real growth of e-commerce in the Denver market. It certainly is exciting and really healthy for the market to see this kind of industry start to take off,” said Tyler Carner, a CBRE industrial specialist who was not involved in the deal.
Amazon leased Majestic Commercenter’s new 452,400-square-foot speculative distribution building at 19799 E. 36th Drive in Aurora for a package “sortation” center, where products customers have ordered are sorted and shipped to post offices for delivery. The center will speed up the delivery process and allow the e-retail giant to get packages to customers on Sundays. Amazon Prime members will be able to place orders until 11:59 p.m. and still get free two-day shipping.
“We are always looking for ways to better serve customers, and this facility enables faster delivery with later cutoff times for orders,” spokeswoman Ashley Robinson said in an email. “We want to make sure we are placed as close to the customer as possible to ensure we can offer a great Prime service and fast shipping speeds to customers.”
Amazon is moving quickly to open the center, which will employ “hundreds” of workers. Asked if there will be related facilities in the Denver area, Amazon said it has “nothing to announce at this time.”
Neither Majestic Realty Co., which owns the building, nor the brokers who represented Amazon – Alec Rhodes, Tyler Smith and Aaron Valdez of Cushman & Wakefield – would comment on the transaction.
The Rocky Mountain region is not a huge distribution hub because its population density is low in comparison with markets like Chicago, Los Angeles and Houston, for instance. But it is important from a regional distribution standpoint, and as e-commerce companies build out their distribution networks to get products to consumers quickly, Denver and similar markets come into play.
There currently are a couple of million-sf deals, and a couple of 250,000-sf or larger deals, in the market that are e-commerce related, according to Carner.
“If you look at these e-commerce groups around the country, they have these large fulfillment centers and they often have smaller distribution centers, often more infill located. So we suspect we will see some of those going forward,” he said.
In addition, there are “multiple,” smaller e-commerce deals in the market, he said, adding third-party logistics companies that supply e-commerce companies also will be looking for space.
“What we really are seeing, and will see, is growth in everything from smaller, 25,000- to 50,000-square-foot users connected to e-commerce to the larger e-commerce fulfillment centers,” Carner said.