Amazon plans to sublease roughly 10 million square feet of unneeded warehouse due to a slowdown in growth after rapid expansion during COVID-19 lockdowns.
That represents 2 percent pf the distribution center space the tight-lipped online retailer either owned or leased as of December. Based on typical fulfillment center sizes it could represent between 10 and 15 locations.
There are 44 Amazon fulfillment locations in California. That includes eight in the Northern San Joaquin Valley — three in Tracy, three in Stockton, and one each in Manteca and Patterson.
Two more Amazon fulfillment centers are moving forward opening in the region — a 1.08 million square-foot facility on Fulkerth Road east pf Highway 99 in Turlock where hiring is now underway and a multi-story facility on Eleventh Street in Tracy.
When completed, just over 20 percent of Amazon’s fulfilment centers in California will be in the Northern San Joaquin Valley — second behind San Bernardino and Riverside counties that are also known as the Inland Empire.
The fulfillment center tally doesn’t include other Amazon facilities such as the distribution center for Prime customers in Manteca on Louise Avenue that serves the Modesto-Stockton-Tracy consumer triangle.
It is expected that the space being shed will be concentrated primarily in its biggest markets — California, New York and New Jersey.
According to Amazon, its worst quarter for growth in almost two decades was in January through March in this year.
Product sales were flat and online sales declined 3 percent. It was the first drop in online sales since Amazon started reporting the metric in 2016.
The news of Amazon moving to sublease space is not expected to severely dampen the demand for distribution center space.
Developers that cater to the market are bringing major distribution center complexes on Eleventh Street by the new Amazon site and in Lathrop by the Wayfair distribution center on the 120 Bypass to market. More concentrations of distribution centers are also breaking ground to the north of Manteca near Stockton Airport.