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Amazon Eyes Cypress Site as New Logistics Hub

Amazon.com Inc. is looking into building a last-mile logistics facility at the former campus of Mitsubishi Motors North America Inc. in Cypress.

The project, if it moves ahead, would be the first ground-up industrial project built specifically for the e-commerce giant in Orange County. It would also be the largest commercial development in Cypress, OC’s 22nd largest city by population with about 49,800 residents, in several years.

Early stage plans for the proposed development—along Katella Avenue and about a block from Valley View Street—were recently presented to the city on behalf of Amazon.

Indianapolis-based industrial developer Duke Realty Corp. (NYSE: DRE), which has local operations in Irvine, is heading the project, city filings indicate.

Specifics for the size of the project and a proposed timeline haven’t been disclosed. Along with zoning changes, the distribution facility would also require an environmental impact review to be completed prior to work starting.

2 Buildings Staying

The two largest existing buildings at the 23-acre campus—a 145,000-square-foot warehouse building on the southwest portion of the property, and a 180,000-square-foot office building that fronts Katella Avenue—would remain, according to city documents.

It is expected that Amazon would lease the 145,000-square-foot warehouse, along with the newly built facilities, sources tell the Business Journal.

Leasing plans for the three-story building, which along with other facilities at the site was vacated by Mitsubishi around the start of the year, haven’t been disclosed.

Other smaller buildings on the campus would be demolished to make way for a new logistics center, filings indicate.

An industrial project in the 350,000-square-foot range could likely fit in the space.

The campus is about 2 miles north of the Garden Grove (22) Freeway, and a few blocks east of the Los Alamitos Race Course, which is in Cypress.

E-Commerce Push

The proposal is the latest sign of Amazon’s growing presence in OC.

The company has been by far the most active industrial tenant in Orange County over the past nine months; its reported leasing activity in OC since the end of September totals close to 1 million square feet, not including the Cypress proposal.

It’s snapped up large facilities in Santa Ana, Anaheim and Mission Viejo during that time. Several of those facilities got major upgrades prior to announcing Amazon as a tenant.

A year ago, Amazon occupied less than 450,000 square feet of industrial space in the county. Previously, Amazon served much of OC through its Inland Empire facilities, which total nearly 15 million square feet.

The local moves come amid increasing demand from e-commerce providers for last-mile distribution sites in highly populated areas, according to area industrial brokers and developers.

That demand has only intensified amid the coronavirus pandemic, which has pushed up the market value of Amazon (Nasdaq: AMZN) to $1.4 trillion. The company has seen a 45% increase in its stock since the start of the year.

$57M Sale

Mitsubishi Motors last July announced plans 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.”

Nissan North America Inc. is headquartered in Franklin, Tenn., a suburb of Nashville.

Mitsubishi completed the move around the start of the year. The carmaker had been based in Orange County since 1988.

Last November, the campus was sold to 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 $57.5 million for the property; records indicate that the purchase was financed through a loan made with Duke Realty.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.
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