LOGISTICS

Amazon is Going Shopping…at the Mall (wtf)

September 10, 2020



Anybody else seeing the irony here?  After spending the last 20 years beating down malls, Amazon is now buying them up. 
 
Come again?
 
Instead of irony, maybe it’s just smart business, take 155 from Jeff Bezos.
 
Simon likes Amazon
But seriously, what’s happening is this.  Simon Property Group, one of the country’s largest mall operators, is talking to Amazon.  Why?  Simon wants to lease its anchor store space to Amazon to use as distribution centers according to the Wall Street Journal.  What used to be Sears and JcPenneys would become Amazon warehouses in essence. 
 
Fair deal?
It is a good deal for both sides.  For Simon, they get to turn the ghostly spaces into humming distributions centers.  The WSJ reported that deals could happen as low as $4 a square foot.  The average rent for warehouses is $10.  Ok, that’s a discount, but 4 is better than nothing for Simon.
 
Amazon’s like a kid in the arcade
For Amazon, it’s a sweet deal.  They get premium space from many points of view, especially location, so we can get our Toy Story space aliens super quick (that’s’ the number one selling toy on Amazon right now).  And of course, they’re scoring a win on the price.  But hey, they did put in the hard work for decades to make that space practically worthless.  So it’s poetic justice for them to swoop in and pick up the space for practically pennies on the dollar.
 
Cue the 80s Toto music please.

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