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I don't get how this is a story. Who wouldn't think Amazon is buying land for warehouses? And what exactly does it mean for them to be doing it "quietly"? Ar

by treis 4y ago

I don't get how this is a story. Who wouldn't think Amazon is buying land for warehouses? And what exactly does it mean for them to be doing it "quietly"? Are they supposed to bring a marching band along everytime they look at property?

Invictus0 4y ago
> Who wouldn't think Amazon is buying land for warehouses? The people that read the article, which stated that for many years, Amazon was not buying land for warehouses.
- mikestew 4y ago
  I read the article, and look what I found, not two paragraphs in: "Amazon plans to use much of the real estate for a new generation of towering fulfillment centers that can store a wide variety of products close to customers in populous areas, according to people familiar with the strategy." So it sounds like Amazon is buying land for warehouses, might be reading different articles, dunno.
  - pessimizer 4y ago
    "Buying land is a major shift for Amazon, which historically relied on a handful of developers to find property, build fairly simple warehouses and rent them back to the company." The comment was "Who wouldn't think Amazon is buying up land for warehouses?". The answer is anyone who was familiar with what Amazon was doing until 3 years ago. If you thought three years ago that Amazon was buying up land for warehouses, because it's so obviously obvious, you would have been wrong.
- treis 4y ago
  I did read it: >the company said there is no change in its long-term real estate strategy This is a made up non-story with a click bait headline.
curiouscats 4y ago
From the article: "Buying land is a major shift for Amazon, which historically relied on a handful of developers to find property, build fairly simple warehouses and rent them back to the company." That is the news in my opinion. They were renting before, in the last 2 years they started buying a lot of land (they still rent a lot too).
- devoutsalsa 4y ago
  I’d guess that Amazon doesn’t want to be at the mercy of landlords that jack up the prices. Rent increases can eat into your margin.
  - mywittyname 4y ago
    They probably weren't very experienced in the area of property development/management and decided to get some partners early on to help out. I'm sure now their holdings are large enough to justify an entire property management division.
- merely-unlikely 4y ago
  That and, "The new facilities can be 100 feet tall or more, are packed with state-of-the-art automation and require lots of electricity... The new facilities can cost twice as much to build as typical warehouses, which currently run about $200 per square foot. So Amazon is courting a new class of investor to help finance the expansion" Their development model has shifted and the warehouses are becoming more advanced and specialized.
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bregma 4y ago
If they buy up enough land quietly they can then spin it out as a REIT and lease it back from themselves, thus writing off capital gains and moving them under operating expenses as a major tax dodge. If they did it loudly people would start speculating which will present reduced wealth extraction by siphoning off rent. The goal is to avoid letting other people get rich and cornering all the capital for yourself. Stealth is a pirate's best friend.
- merely-unlikely 4y ago
  Just like what happened with housing around planned HQ2 sites.
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kolbe 4y ago
It's total clickbait. Also, the article mentions they bought 4000 acres in 2 years. The vast majority of this is rural, where farmland runs 5-20k per acre. Let's be generous and say they spent 50k per acre. That's $200mm dollars. Absolutely nothing to amazon.
- sib 4y ago
  And a single full-size Amazon fulfillment center plus its associated truck yards and employee parking lots can easily take up 0.5 - 1.0 square miles (320 - 640 acres / 130 - 260 hectares), so this doesn't seem like a lot of land, given that they already have more than 100 fulfillment centers in the US.

by treis 4y ago

Invictus0 4y ago

> Who wouldn't think Amazon is buying land for warehouses? The people that read the article, which stated that for many years, Amazon was not buying land for warehouses.

mikestew 4y ago
I read the article, and look what I found, not two paragraphs in: "Amazon plans to use much of the real estate for a new generation of towering fulfillment centers that can store a wide variety of products close to customers in populous areas, according to people familiar with the strategy." So it sounds like Amazon is buying land for warehouses, might be reading different articles, dunno.
- pessimizer 4y ago
  "Buying land is a major shift for Amazon, which historically relied on a handful of developers to find property, build fairly simple warehouses and rent them back to the company." The comment was "Who wouldn't think Amazon is buying up land for warehouses?". The answer is anyone who was familiar with what Amazon was doing until 3 years ago. If you thought three years ago that Amazon was buying up land for warehouses, because it's so obviously obvious, you would have been wrong.
treis 4y ago
I did read it: >the company said there is no change in its long-term real estate strategy This is a made up non-story with a click bait headline.

curiouscats 4y ago

From the article: "Buying land is a major shift for Amazon, which historically relied on a handful of developers to find property, build fairly simple warehouses and rent them back to the company." That is the news in my opinion. They were renting before, in the last 2 years they started buying a lot of land (they still rent a lot too).

devoutsalsa 4y ago
I’d guess that Amazon doesn’t want to be at the mercy of landlords that jack up the prices. Rent increases can eat into your margin.
- mywittyname 4y ago
  They probably weren't very experienced in the area of property development/management and decided to get some partners early on to help out. I'm sure now their holdings are large enough to justify an entire property management division.
merely-unlikely 4y ago
That and, "The new facilities can be 100 feet tall or more, are packed with state-of-the-art automation and require lots of electricity... The new facilities can cost twice as much to build as typical warehouses, which currently run about $200 per square foot. So Amazon is courting a new class of investor to help finance the expansion" Their development model has shifted and the warehouses are becoming more advanced and specialized.

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bregma 4y ago

If they buy up enough land quietly they can then spin it out as a REIT and lease it back from themselves, thus writing off capital gains and moving them under operating expenses as a major tax dodge. If they did it loudly people would start speculating which will present reduced wealth extraction by siphoning off rent. The goal is to avoid letting other people get rich and cornering all the capital for yourself. Stealth is a pirate's best friend.

merely-unlikely 4y ago
Just like what happened with housing around planned HQ2 sites.

deleted 4y ago

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kolbe 4y ago

It's total clickbait. Also, the article mentions they bought 4000 acres in 2 years. The vast majority of this is rural, where farmland runs 5-20k per acre. Let's be generous and say they spent 50k per acre. That's $200mm dollars. Absolutely nothing to amazon.

sib 4y ago
And a single full-size Amazon fulfillment center plus its associated truck yards and employee parking lots can easily take up 0.5 - 1.0 square miles (320 - 640 acres / 130 - 260 hectares), so this doesn't seem like a lot of land, given that they already have more than 100 fulfillment centers in the US.