Thanks to Amazon, warehouse rents have never been higher

Amazon is one of the most ravenous warehouse buyers on Earth. The e-commerce giant has been on a warehouse buying spree during the pandemic, alongside a few private equity firms like Blackstone. Over the past two years, the company has more than doubled its warehouse holdings from 192 million square feet at the end of 2019 to more than 410 million square feet today.

All that buying is affecting the industrial real estate market. Warehouse vacancies are effectively zero and rents are spiking to record levels around the world, according to a Feb. 10 report from Prologis, the world’s biggest warehouse landlord. Globally, rents rose a record 15% in 2021; in the US and Canada, the average rent hike was nearly 18%.

Amazon didn’t singlehandedly create the rent spike—but it is easily the biggest contributor to the trend. Amazon has pushed the retail industry toward e-commerce, two-day shipping, and free returns, all of which require a lot of warehouse space. And, in its quest to take control of its own supply chains, Amazon has spent billions of dollars each year to buy real estate as quickly as it becomes available.

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