Amazon “Last Mile” Distribution Center Sells for $22.3 Million

TUCSON, ARIZONA (January 11, 2023) – Cushman & Wakefield of San Francisco and Cushman & Wakefield | Picor arranged the sale of the Amazon Last Mile Distribution building at 775 W Silverlake Road in Tucson in a net investment sale for $22.3 Million ($451 PSF). The 49,500-square-foot distribution center with 15 loading docks, is located near I-10 and I-19, close to downtown Tucson.

The Amazon “last mile” Distribution Center was constructed in 2019 on the 10.74-acre parcel and leased to Amazon.

The investment group, FEM Real Estate out of New Jersey (Evin Feliciano, manager) real estate investors purchased it for $18 million ($364 PSF) in July 2012 was the seller. The Varnhagen Family Trust of San Francisco, c/o Anthony Varnhagen as trustee is the buyer with 7 years remaining on the lease and three 5-year options.

Amazon’s “last mile” distribution centers play a key role in the company’s logistics.

When the economy sputtered with the coronavirus pandemic‘s spread, unemployment surged as employers laid off workers by the thousands. Amazon took a different tack, hiring 400,000 workers to stow, sort, pick, pack and deliver goods from its warehouses across the country, and pushing its total employee count over 1.1 million people.

It didn’t stop there. The e-commerce giant leased 12 Boeing 767-300 cargo aircraft, bringing its air fleet above 80 jets. It added 220 package facilities since the start of 2020, ranging from urban delivery stations to giant warehouses, according to an industry consultant.

Amazon used the crisis, when prices on everything from commercial real estate to cargo jets plummeted, to amass a logistics system already beginning to rival the U.S. operations of United Parcel Service and FedEx.. But its ambition reaches well beyond delivering parcels to its own customers, the company is building a logistics system to one day deliver packages for customers to compete directly against UPS and FedEx, something it’s already doing in the United Kingdom.

Amazon reported on a recent earnings call that it boosted its fulfillment capacity — the collection of warehouses, delivery stations and drivers it uses to get packages to customers — by 50 percent this year, helping fuel $30 billion in total capital spending.

While Amazon’s move into shipping its own packages and freight has been building for years, the implications will provide it a stark advantage over Amazon’s rivals that Amazon now delivers for too.

Andrew Bogardus and Douglas Longyear of Cushman & Wakefield in San Francisco with Steve Cohen of Cushman & Wakefield | Picor in Tucson handled the transaction for seller and Michael Kuhn from the San Francisco Bay area represented the buyer.

For more information, Longyear can be contacted at 415.677.0458, Bogardus can be called at 415.677.0421 and Cohen should be reached at 520.546.2750.

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