Amazon is expected to move into the former campus of Mitsubishi Motors North America Inc. in Cypress next July, following tenant-improvements currently underway at the 23-acre site.
The e-commerce giant’s footprint at the site—along Katella Avenue and about a block from Valley View Street—are smaller than previous estimates, with a large portion of the existing space on the back side of the campus being razed to accommodate Amazon’s parking needs.
Amazon will occupy an existing but upgraded 146,000-square-foot warehouse at the property, along with a parking lot and loading area totaling 11.5 acres, according to Duke Realty (NYSE: DRE), the Indianapolis-based industrial developer heading the project.
“This is the perfect property for the tenant’s needs that will provide strong benefits for the city,” said Nancy Shultz, senior vice president of Duke Realty’s Southern California operations, which are based in Irvine.
Prior estimates for Amazon’s footprint at the site ran well over 200,000 square feet.
In addition to the warehouse, the site currently holds a 180,000-square-foot office building and about 70,000 square feet of R&D buildings.
Those three R&D buildings are currently being razed to make way for the parking and loading lot, which will include 779 parking spaces, including electric vehicle (EV) charging and van parking spaces. Nine trailer parking spaces and 20 bike spaces are proposed, according to Duke.
The site is expected to create up to 700 jobs in the area, Duke said. Amazon’s lease is expected to run at least 10 years.
The office portion of the site formerly used by Mitsubishi is expected to remain vacant for the time being, as there is no parking available.
Mitsubishi vacated the site around the start of the year after announcing plans last July to relocate its headquarters to Tennessee to “take advantage of [the area’s] vibrant technology skill set, all while realizing cost savings through the business-friendly work environment and proximity to sister company, Nissan.”
Duke became involved in the site last November in a venture headed by Irvine’s Greenlaw Partners, one of Orange County’s most active commercial real estate investors in recent years.
Greenlaw paid Mitsubishi a reported $57.5 million for the property.
This October, Duke paid a reported $73.4 million to become sole owner of the campus.
The Cypress property adds to a flurry of Southern California investment activity for Duke, which sports a $14.3 billion market valuation and is among the country’s largest industrial developers.
The company’s Irvine office is currently investing $225 million across multiple area industrial projects totaling 1.1 million square feet.
The largest project underway is a 528,710-square-foot speculative building in Los Angeles, as well as a 120,609-square-foot development in Rancho Cucamonga and a 290,303-square-foot building in Los Angeles that’s pre-leased to a major regional beverage distributor, the company said.
Duke’s Southern California portfolio totals 15.7 million square feet across 35 properties with another three million square feet in its development pipeline.
The company is actively looking for additional Orange County opportunities, notes Shultz.
“It’s no secret that demand for industrial space has been propelled by the pandemic, which has been led by online shopping trends but is also felt across the board for the sector,” she said.
“With increasing industrial demand, shrinking vacancies and challenges to delivering new product, we will continue to see rates rise.”
Amazon has been on a buying and leasing spree across Orange County that’s added more than 1.5 million square feet of industrial space to its local portfolio in the past two years, with much more on the way.
The company made its largest reported real estate investment at the end of October, closing on a 31-acre site in Irvine formerly belonging to the motion and control division of aerospace firm Parker-Hannifin.
Amazon paid $112.5 million for the vacant site, property records indicate. It’s the most paid to date by the company in Orange County and brings the company’s local spending to more than $175 million in the past quarter.
The site is expected to become a ground-up industrial and logistics facility, joining its plans in Cypress and a third site in Santa Ana.