Amazon is eyeing a $15 billion warehouse blitz, with plans to open 80 new logistics facilities across the U.S. and lock in 15- to 25-year leases.

That’s a bold move in a battered CRE landscape.

Tariffs are driving up costs, interest rates remain high, and demand is uneven. Office vacancies are stuck near 20%. Industrial has quietly hit a 10-year high at 7%. Most occupiers are trimming footprints and delaying decisions.

But not Amazon. It’s rolling out multistory fulfillment centers, last-mile hubs, and robotics at scale—doubling down on infrastructure while cutting office and leaning into flex.

Read on—you’ll learn:

• Why Amazon’s lease strategy breaks from market norms—and what it signals
• How tariffs and inflation are reshaping industrial real estate math
• What this signals about automation, data infrastructure, and long-term strategy
• What tenants should do now—before the next supply chain crunch hits

Amazon’s $15B Expansion: What We Know

Amazon is not slowing down spending on industrial real estate, even as other large-scale developers pull back amidst uncertainty of tariff price-hikes.

Prologis reported a 30% drop in new global logistics starts during 2024

And according to the MSCI, warehouse sales dropped 34% year-over-year in April 2025, the steepest decline of any CRE sector, as tariffs drove up construction costs and froze developer activity.

Despite these tremors, Amazon is proceeding with a $15 billion push into 80+ logistics facilities, locking in 15–25 year leases and soliciting RFPs from capital partners.

So, as others retreat, Amazon’s move to press forward effectively seizes market share and negotiating power at a time when developers may be more flexible. This underscores how assets like these can serve as competitive moats in the long game of logistics and e-commerce.

Locking in Long-Term Leases

Amazon is using tactical long-term lease commitments and capital partnerships to double-down on the infrastructure it needs. And pursuing 15- to 25-year lease terms for its upcoming logistics sites Is a bold deviation in a market where long-term liabilities have largely become radioactive.

For perspective:

• Average lease term for industrial tenants in 2024 was just 7.2 years. Even among Fortune 500 tenants, the preference is skewing toward shorter, more agile leases.
• Amazon’s push represents a 2x to 3x deviation from market norms—akin to an institutional land play.
• Office tenants are cutting commitments even further—average lease term fell to 4 years in 2024, down from 8.3 pre-pandemic.

Against this backdrop, signing long term leases reveals:

• Confidence in long-term demand
• A hedge against future construction inflation
• An intent to secure logistics control before the next supply chain crunch hits

While most of the market is hesitating, Amazon is locking in leverage at a time when developers are more open to negotiation and long-term partnerships.

CEO Andy Jassy put it plainly:

“We have invested and will continue to invest aggressively to expand and leverage our customer base, brand and infrastructure.”

Boosting Last-Mile Expansion

Scooping up new locations also sharpens Amazon’s competitive advantage in delivery turnaround times. It broke the entire logistics model with its one-day shipping promise. Now, it’s building on that lead to make fast feel even faster.

“Amazon is ramping up its number of delivery centers and other facilities and equipment across its vast fulfillment network this year as the online retailer pushes to boost e-commerce sales and cut costs and the time it takes to fill orders.” CoStar

The company already operates over 1,200 logistics facilities in the U.S., with more than 83% exceeding 100,000 square feet, according to CoStar’s Jesse Gundersheim.

The new facility rollout is expected to span both urban and rural markets, with assets tailored to the needs of their regional logistics strategy. These include:

• Multistory fulfillment centers, increasingly necessary in dense, infill locations where land is scarce and vertical automation is cost-efficient.
• Last-mile delivery hubs to reduce delivery windows and cut transportation costs, particularly in underserved rural areas.

Trouble With Tariffs

Why would Amazon lock into 15- to 25-year warehouse leases and ramp up logistics investment just as construction costs are surging and industrial demand is cooling?

The answer isn’t just about expansion. It’s about control, timing, and geopolitical foresight.

The Trump Administration’s tariffs have directly hit the inputs of industrial development:

• 25% duties on imported steel and aluminum—critical to warehouse frames, racking systems, dock equipment, and data center enclosures.
• Tariff hikes looming for lumber, concrete, and prefabricated construction materials, placing pressure on foundation and structural costs.
• Escalating prices for robotics, automation hardware, and electrical components from China and Southeast Asia—core to Amazon’s warehouse tech stack.

These increases are already reshaping development math, enough for some to leave the game:

• Steel prices jumped 18% in Q1 2025 alone, per the U.S. Bureau of Labor Statistics.
• Lead times onkey components like automated conveyor belts, pick-pack systems, and industrial HVAC units have extended from 12 weeks to over 20 in some regions.
• Construction cost inflation for industrial properties hit 6.8% year-over-year by April 2025, outpacing rent growth in most Tier 1 logistics markets.

Why is Amazon Expanding Industrial Real Estate Now?

As rising costs and trade headwinds squeeze margins, new industrial construction starts fell by over 35% year-over-year.

Amazon’s move is less about reacting to current demand—and more about locking in long-term infrastructure before costs spike further or geopolitical tensions escalate.

Here’s the strategic logic:

• Secure real estate now, while landlords are more negotiable and the pipeline is thinning.
• Hedge against future inflation—locking in construction pricing and rents before another round of cost shocks.
• Deploy robotics and AI infrastructure while competitors are frozen by CAPEX constraints.
• Fortify U.S.-based logistics capacity ahead of what could become a long cycle of supply chain nationalism.

 As CEO Andy Jassy told shareholders:

“The faster demand grows, the more data centers, chips and hardware we need to procure, and AI chips are much more expensive than CPU chips.”

The same applies to logistics. Warehouse space, like compute power, is now a strategic utility—and Amazon is ensuring it won’t be priced out or left behind.

Because they’re not just dealing with warehouses, they’re phasing in automation.

These new centers will be loaded with robotics like Proteus, Amazon’s first fully autonomous mobile warehouse robot, accelerating fulfillment beyond what most rivals can replicate.

Data Center Buildouts

Amazon is laying the groundwork to dominate the next era of AI and cloud computing. In 2025 alone, the company plans to spend over $100 billion in capital expenditures—most of it to expand its Amazon Web Services (AWS) footprint, scale AI chip infrastructure, and power its own generative models.

During Amazon’s Q1 earnings call, Jassy emphasized that the “vast majority” of the company’s capital budget will go toward this next-gen infrastructure—not offices, not retail, but cloud capacity and compute power.

While spending cools in nearly every other sector,  due to inflation and tariff headwinds, robotics and AI remain the exception.

“Amazon, Microsoft, OpenAI and other firms intend to keep spending on data centers, even as Trump’s tariffs threaten to increase development costs that could potentially stymie the nation’s booming AI industry along with the industrial real estate sector.” Costar

Takeaways for Tenants

Don’t Confuse the Current Slump With Long-Term Retreat.

Amazon’s $15B warehouse blitz is a sharp reminder that while the market may be soft, smart players are moving aggressively to lock in long-term control.

For tenants, this is a signal: the best deals are available now, not when the cycle turns. Long-term leases may feel risky, but in mission-critical categories like logistics or automation, they’re a hedge against inflation, scarcity, and CAPEX shocks. Amazon’s buildouts aren’t just about space—they’re about securing robotic, last-mile-ready infrastructure that’s increasingly hard to find. And while Amazon sheds office space and leans into flex, it’s going long where it counts.

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