My take: Amazon’s $392 million behemoth

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Good evening,

It was evident when the steel went up at the former GM Boxwood plant this was not your run-of-the-mill Amazon distribution center.

The structure came in at the height of a mid-rise apartment complex, not the layout of a typical fulfillment center. Meanwhile, Amazon stuck to a more modest initial square footage figure, adding an air of mystery about what would happen inside.

We now know that the site, which went into operation in the fall, is (pardon the cliche) a game-changer even in the super-sized world of Amazon.

For one thing, Boxwood comes with an army of robots and other types of automation that could more easily move goods from one level to another. Some of this is likely to be a work in progress as the company scales up its technology and has been testing and piloting.

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Yesterday, we gained further insights into the scope of the complex when Australian financial services giant Macquarie announced the purchase of the building on behalf of an unnamed investor.

Amazon typically does not own its own buildings and instead leases the centers under long-term deals to free up capital. The GM site was first purchased by Harvey, Hanna, and Associates, Newport, with Nevada-based Dermody Properties buying a portion of a site that still has room for further development.

According to the Philadelphia Business Journal, the final sales price came in at a whopping $392 million. So far this year, it’s the highest selling price for an industrial building in the nation.

And if that was not enough, Amazon went on the open a site off Route 13 south of New Castle, with more space taken at a location just to the south, while converting space in Seaford into a “Mini-Me” distribution site.

It adds up to a lot of activity that has been good news for the Delaware economy, especially the key construction industry. How this plays out in the future in terms of the current labor shortage and the overall quality of jobs in the state remains to be seen.

Enjoy your evening. We have two more of our newsletters this week. – Doug Rainey, chief content officer.

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