Amazon to Take More Than 400,000 SQFT for Delivery Stations in San Jose

Amazon, Colliers International, Cushman and Wakefield, PS Business Parks, Little Orchard Distrubtion Center, Seefried Industrial Properties
Image Courtesy of PS Business Parks

By Meghan Hall

E-commerce companies and large distributors are constantly on the lookout for industrial and warehouse space within close proximity of major population centers: a key consideration for firms who are in the business of fast shipping and delivery. Over the past several quarters, Amazon has been snapping up space around the Bay Area, and most recently has inked two more leases for delivery stations in San Jose, the Silicon Valley Business Journal reports. The first lease, for the Little Orchard Distribution Center, has Amazon taking the entire 212,840 square foot complex. A second lease for 223,827 square foot Class A manufacturing facility at 970 McLaughlin Ave. was also signed.

The Little Orchard Distribution Center is located at 1710 Little Orchard Street in San Jose, and features on-site parking, individual signing, dock-loading options and 24-hour access. The owner of the property is Glendale, Calif.-based PS Business Parks, who owns more than a dozen industrial properties in Silicon Valley and the wider Bay Area, including the Fremont Commerce Center and the Kifer Industrial Park in Sunnyvale. According to a market report released by Cushman and Wakefield, the lease for the Little Orchard Distribution Center was signed during the fourth quarter of 2019.

The second lease was signed in agreement with Seefried Industrial Properties, who is working to construct a 223,827 square foot Class A manufacturing facility on nearly 11 acres on 970 McLaughlin Avenue. Completion is scheduled for the first quarter of this year. Seefried originally purchased the property with Clarion Partners for $15.15 million in April of 2019.

Over the last several months, Amazon has pursued several large leasing deals throughout the Bay Area, notably taking 600,000 square feet of space in Livermore at the Longfellow Logistics Center in November of 2019, and an additional 343,000 square feet of space at McCarthy Creekside in Milpitas. Also in the fourth quarter, a Colliers International report notes that Amazon also took a modest 70,000 square feet at 44051 Osgood Road in Fremont.

Colliers notes that it was a strong quarter for Silicon Valley industrial and warehouse product, which recorded nearly two million square feet of gross absorption during the fourth quarter. Net absorption sat at a positive 739,000 square feet, the highest since the second quarter of 2016. Vacancy rates remain low at 2.7 percent and combined industrial and warehouse rents reached $1.25 triple-net. There were eight completions larger than 100,000 square feet, which added more than two million square feet to the market; however, more than half of that space has been leased.

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