This is what I was thinking about with an en passant sentence fragment last Monday:
Amazon's $1 Billion Industrial Innovation Fund: They Like Robots (AMZN)
Although they'll never find another Kiva (value/price, simplicity, ROI) a company like Amazon, with 1.5 million employees and possible warehouse overbuilding is going to be attracted to workers that don't unionize and can be moved around from location to location....
I have to stop with the throwaway lines and maybe start doing posts.
From ZeroHedge, May 22:
It isn't just Walmart and Target that are feeling the effects of the forthcoming economic slowdown. Now, even e-commerce giant Amazon is starting to feel the pain - and take action accordingly.
The retail giant is reportedly "stuck with too much warehouse capacity" now that spending has cooled post-pandemic. The company is looking to end leases with some of its landlords, Bloomberg reported this weekend.
Amazon currently has excess capacity in New York, New Jersey, Southern California and Atlanta, the report says. The excess capacity is said to be more than 10 million square feet, but one source estimated it could even be triple that.
The company has the option of negotiating lease terminations with some of its landlords, which include Prologis, the report says.
However, the 10 million square feet that Amazon is looking to offload or sublet is only about 5% of the square footage that the company added during the pandemic.
An Amazon spokeswoman said: “Subleasing is a very common real estate practice. It allows us to relieve the financial obligations associated with an existing building that no longer meets our needs. Subleasing is something many established corporations do to help manage their real estate portfolio.”
The news comes after Amazon reported a quarter wherein they cautioned investors about profit guidance and admitted to overbuilding during the pandemic. By the end of 2021, Amazon had leased twice as much warehouse space as it had two years prior.
Amazon has engaged with real estate firm KBC Advisors to help it determine which parcels of land to sublet and which, if any leases, it should terminate....
....MORE
Well, it was a good run.
Logistics: "Amazon is fuelling North America's worst warehouse shortage....and it's right here in Canada"Probably the high point: Dec. 13, 2020:
There were no stories like this when we began pitching warehousing and cold storage. It may be time to exit the portfolio investments and, if your mandate says you have to have commercial exposure, consider owning the cash flow directly. Always a tricky transition though..
Real Estate: "Logistics market is hot, but is a bubble forming?"
It's always nice to see a sector you've been babbling about for a couple years finally referred to as a bubble.
That post has some of our previous links, there are many, many more; use the 'search blog' box if interested.
Big Money Still Buying Warehouse Assets: Canada Pension Plan Investment Board Enters Into $1.1 Billion J.V.
We on the other hand got bored after pitching them for three years and moved on to something shiny - Look, an NFT!
So, once again, short attention span investing proves to have some risk management qualities.
And if you know anyone looking for an NFT or twenty, I know where you can get your hands on some.
No Bored Apes though, a pox on the Bored Ape crowd.
