By Aaron Jodka | August 2020
Amazon’s industrial growth — both locally and nationally — has been nothing less than remarkable. The second quarter marked the largest single-occupancy quarter in the e-commerce giant’s history across the U.S. Based on its growth trajectory, Amazon is just getting started. As we have noted before, it is the most active tenant in Greater Boston and continues to add to its distribution network locally. Its next path to growth may be a bit different, however.
Amazon could be taking over mall anchor locations from bankrupt retailers JCPenney and Sears. As the Wall Street Journal reported, Amazon is in talks with Simon Property Group to turn these vacant boxes into fulfillment or distribution centers. Per the WSJ, Simon has 63 JCPenney and 11 Sears stores in its mall portfolio. Four of those Sears locations and three JCPenney stores are in Greater Boston.
No deal is done, so this remains a “what if?” scenario, but the total amount of space here in Simon malls occupied by Sears is just over 450,000 SF, the same as JCPenney’s, per CoStar data. The Emerald Square Mall, Northshore Mall, Solomon Pond Mall, South Shore Plaza, and Square One Mall would all be affected by these closures. Both Emerald Square and Solomon Pond house a JCPenney and a Sears, making it unlikely that each closing anchor would become a distribution/fulfillment center. However, an estimate of 600,000 SF +/- of potential growth is not out of the question.
Amazon is no stranger to physical retail, as its various Amazon stores, along with Whole Foods, occupy about one million SF across Greater Boston. But this foray into mall anchors is new and different. Again this is no done deal, and among the wrinkles is that Simon and Brookfield Property Partners are said to be negotiating to purchase JCPenney’s retail operations out of bankruptcy, again per the WSJ.