When word spread this month that Amazon, the 800-pound gorilla of industrial real estate users, would be subleasing millions of square feet of logistics space, it grabbed the attention of the market.
But any anxiety the news may have elicited is premature, John Morris, president of Americas industrial and logistics for CBRE, said Tuesday at the ICSC retail conference in Las Vegas. Amazon, he said, built a supply chain system for business it anticipates in 2026 and it will take time for consumer demand to catch up.
The Seattle-based e-commerce giant, which said in earnings calls earlier this year that it was slowing its pace of real estate acquisition, decided to sublease at least 10 million square feet of warehouse space and is exploring potentially ending or renegotiating leases with outside warehouse owners, according to the Wall Street Journal. The change is significant because Amazon has been one of the most active companies leasing industrial space across the country.
Morris, who leads of team of more than 840 professionals at CBRE, the nation's largest brokerage, shrugged off the concern during a panel discussion about last-mile distribution at ICSC.
"We're not in 2026 yet, but that's going to be OK," Morris said. "They're just going to mitigate some of those costs in the interim. But I heard some commentary and read some things lately that, 'Oh my God Amazon's in trouble.' No they're not. They're just going to take a little bit of their space and pull it back a little bit. But it'll be ready when all of us continue to shop online and in stores and want to be able to do it any way we want and whenever we want."
Amazon's industrial appetite across the U.S. appeared insatiable after years of growth, but in recent months the e-commerce behemoth had given clues that it appeared satiated at least for now. In April, Amazon had to find a subtenant to take over one of two industrial buildings in San Leandro, California. It's also been revealed that it had plans to slow down projects in Los Angeles, Philadelphia, San Diego and other regions.
In February, Amazon said it would moderate its growth after doubling its fulfillment network size since 2020. The company spent more than $25 billion on leased property in 2021 and another more than $5 billion on build-to-suit development.
An Amazon representative did not respond to a CoStar request to comment.