Amazon on verge of closing two major office leases in Vancouver and Toronto
The online behemoth appears to be expanding its position in the Canadian marketplace
Amazon.com Inc. is close to finalizing deals to expand its office footprint substantially in both Toronto and Vancouver, moves that indicate its growing presence in the Canadian marketplace.
Ross Moore, a senior vice-president with Cresa Vancouver Commercial Real Estate Services, said industry sources indicate the Seattle-based company, has a deal to take 147,000 square feet in a new building planned by Oxford Properties in downtown Vancouver at 401 W. Georgia St. that would double its size in the city. He said Amazon is also finalizing details on space in Toronto’s Scotia Plaza.
“I’ve heard this more times that I can keep count. We are all walking around knowing it but nobody is saying it,” said Moore, about plans for the new Vancouver office being developed by Oxford, which is a subsidiary of the Ontario Municipal Employees Retirement System.
Officials with Oxford would not comment but a separate source indicated Amazon and the real estate company have a tentative deal in place in Vancouver that has not closed. Another source indicated the company has lined up 112,000 square feet in Scotia Plaza. Real estate company Jones Lang LaSalle, which has been working with Amazon, would not comment.
An Amazon spokesperson would not comment on pending details. “I don’t have anything to share with regard to new office spaces coming up in Toronto or Vancouver at the moment. I can tell you that we find exceptional talent in both cities and are growing! As of today we have over 100 open roles (job postings) in Toronto and over 300 open roles in Vancouver,” according to an emailed statement from the online giant on its growing presence in Canada.
Doug Stephens, the founder of Toronto-based retail Prophet, said the office expansion is inline with where he says Amazon is going in the Canadian marketplace — namely an increasingly dominant retail market share.
“I was just staying in a suburb of Seattle and the whole town is being transformed because they are just hiring like there is no tomorrow. There are cranes everywhere,” said Stephens, in reference to Amazon which will have an estimated 12 million square feet of office space in the Seattle area by 2020. “It makes Wal-Mart of the 1980s look small by comparison.”
As to the future of the retail giant in the Canadian e-commerce marketplace, he says Amazon’s share is already the equivalent of their next six rivals. “They are far and away outstripping anybody else in the Canadian marketplace,” said Stephens, noting while only about eight to nine per cent of the retail marketplace in Canada is online it is growing at a 15 per cent rate annually. “Even search is being impacted. We know 55 per cent of all product searches are going directly to Amazon. You can’t downplay the impact of Amazon on the marketplace.”
Moore noted Amazon’s presence is already huge in Canada, beyond its two latest pending office transactions. The company has 2.2 million square feet of fulfillment centre space in Toronto and 741,000 in Vancouver. “Everybody is ramping up. But while others have converted existing facilities, or some of it (for e-commerce), I’m not sure if anybody in aggregate has as much in pure fulfillment centres,” he said.
In Toronto, Amazon is in a deal to take five floors at the Scotia Plaza previously occupied by law firm Borden Ladner Gervais, which relocated to the Bay Adelaide Centre. The Scotia Plaza space is in addition to 127,000 square feet being occupied at 120 Bremner Blvd. by Amazon currently.
Moore says the moves by Amazon to secure more office space are likely tied to software development and noted earlier this year the company announced plans for a satellite office in Ottawa dedicated to development of projects for Amazon Alexa, the company’s virtual personal assistant.