Amazon to reportedly sell its US office complex

Amazon.com Inc. is selling a vacant Bay Area office complex it purchased in 2021, as a part of undoing a pandemic-era expansion. Dermody Properties LLC is buying the property and will convert it into warehouse space.

Amazon was likely planning to replace the office complex with delivery facilities, but such development has been hindered across the region owing to new municipal regulations and growing building costs.

Amazon paid $123 million for the 29-acre property in Milpitas, California, as part of a strategy to lock up real estate near big cities that could be used for new warehouses and facilitate future growth. The deal is expected to close by the end of April, and Dermody is said to be looking for warehouse tenants.

As companies pivoted to remote work and gave up real estate to cut costs, the Bay Area’s office market has been hit hard over the past two years, with nearly one-fifth of the office market being vacant. Amazon continues to open new facilities — including warehouses in Omaha, Nebraska, and Sioux Falls, South Dakota, earlier this month — but at a more measured pace.

Amazon spokesperson Steve Kelly said, “We’re always evaluating our network to make sure it fits our business needs. As part of this effort, we’ve made the decision to explore selling the Metro Corporate Center site. We’re happy to remain part of the local community and will continue to deliver for customers from our two delivery stations in Milpitas.”