This story has been updated Dec. 12 to correct that Amazon purchased one building at Gateway Grand, not two, for $66.1 million.
Online retail giant Amazon has purchased a 537,429-square-foot Arizona warehouse as it beefs up its industrial portfolio across the country to deliver more goods to customers.
The Seattle-based company purchased the building at 8016 E. Pecos Road in Mesa, Arizona. Greystar Real Estate partners, which opened the warehouse in 2023, sold the building for $66.1 million.
The property is part of the Gateway Grand industrial park, which will eventually total more than 2 million square feet.
"We have purchased the property with the intent of opening an operations facility in the area to provide faster delivery and great service to local customers," Amazon wrote in a statement to CoStar News.
The deal closed around the same time that Amazon Web Services, the cloud division of the e-commerce giant, shelled out more than $78 million for a 164,000-square-foot flex property near Los Angeles. The 8-acre site was once a data center for telecommunications firm EarthLink before being redeveloped.
Amazon said it now expects capital expenditures to total $125 billion for the full year — higher than its previous estimate of $100 million — to expand fast deliveries of perishable groceries and other items across the United States, and increase the power capacity of its data centers for artificial intelligence applications.
Building on Phoenix presence
Amazon has been beefing up its presence in the Mesa Gateway Airport area in recent years.
The company leased a nearly 1.2 million-square-foot storage and distribution center at 8560 E. Elliot Road in Mesa in 2022 and leased another 200,000 square feet at 3405 S. McQueen Road in Chandler in 2020.
Amazon's space commitment in Phoenix comes on the heels of the retailer fine-tuning its logistics network across the country as it replaces older properties and focuses on expanding its same-day delivery facilities.
Following a surge in leasing activity during the first years of the COVID-19 pandemic, Amazon started closing dozens of warehouses and canceling or delaying openings of new facilities from California to New Jersey in spring 2022.
The company resumed its logistics expansion last year after shifting to a regional delivery network from a national fulfillment network in an effort to lower fuel costs and fill orders faster. Amazon said it plans to double its number of same-day delivery facilities over the next few years to get more items closer to customers.
More than 17.5 million square feet of new industrial and flex space was built within a five-mile radius of the Mesa airport since the start of the 2023 with another 1.5 million under construction.
For the record
No buyer broker was listed on Amazon's transaction while CBRE Group Inc.'s Peter Wentis is the listing broker for Gateway Grand, according to CoStar.