By Meghan Hall
Amazon’s operations in the Bay Area are expanding, and the e-commerce giant has taken three large industrial buildings in Milpitas at the McCarthy Creekside Industrial Center, according to city reports. Located at 707, 807 and 907 North McCarthy Boulevard, the three buildings total 343,000 square feet and are part of the second phase of development for the site. The transaction was first reported by The Mercury News.
Phase One’s buildings are already leased. According to previous reporting done by The Registry, Apple plans to lease 314,000 square feet at 407 McCarthy Boulevard. In April of 2018, it was announced that SF Motors planned to take all of 607 North McCarthy Boulevard, the second building in Phase One, which totals about 136,000 square feet. Based on a market brochure circulated by brokerage firm CBRE, the three buildings that Amazon has taken as a part of Phase Two are 131,000, 122,000 and 100,000 square feet.
Construction on the project—which will total more than 800,000 square feet of manufacturing and warehouse space upon completion—has been completed. Situated near Coyote Creek, Route 237 and Interstate 880, the property’s owner, Joey McCarthy of Los Gatos, Calif.-based McCarthy Ranch, the property totals more than 44 acres that will be divided into six parcels. The property will also feature an on-site restaurant totaling 6,000 square feet and more than 1,000 parking spaces. The project is expected to bring more than 1,000 jobs to the area.
In 2009, McCarthy Ranch had submitted plans for a much larger project—totaling more than 50 acres and 1.16 million square feet—according to city documents. The extra 400,000 square feet was intended to be for office uses.
City documents indicate that Amazon plans to use the site for final delivery of goods and is posited as a “delivery station,” according to Hexagon Transportation Consultants Inc., who states that “the delivery station would receive already-packaged goods in large tractor-trailer trucks, sort them for delivery by location, and then dispatch vans for final delivery. Site operations can accommodate 45 delivery vans leaving the project site almost every thirty minutes, meaning that 360 vehicles would depart and return to the property on a daily basis. The project can also accommodate a total of 15 to 20 haul trucks who will operate between the hours of 8:00 PM and 7:00 AM.
In September of this year, Amazon also submitted plans for a Conditional Use Permit Amendment to build two indoor parking facilities to house delivery vans and personal vehicles for distribution facility staff.
Modern consumerism and technology have pushed online delivery timelines to a minimum, with retailers like Amazon promising delivery of goods within days—or even hours. Finding warehouse and distribution space close to a wide consumer base is pivotal; Milpitas, located in Santa Clara County, is not far from major population centers at the heart of Silicon Valley or the East Bay.
“This is a consumption driven market, and consumers expect greater product variety, more convenience and much faster delivery times,” explained Prologis’ U.S. Head of Research, Melinda McLaughlin to The Registry in an October interview. “When you look at the model of old, a company could have a couple of big facilities in the middle of the country, but they had time to deliver those products to the majority of the population. Today, with one-day deliveries, you cannot execute on that service-level from the center of the country.”