Amazon has approximately 470 warehouses in North America, however, it only owns a small percent of that. The company owns 4 million square feet and leases 154 million square feet, and Amazon is planning to lease an additional 41 million square feet this year. In 2015, Amazon was only leasing 58 million square feet and owned less than 1 million. Amazon’s strategy to leasing rather than buying has “cemented the new standard for how e-commerce companies structure supply-chain networks.” This structure allows them to be in more spaces, more quickly, and it keeps costs down. Last year, Amazon’s rental expenses for property and equipment was $3.4 billion, and the company’s operating lease commitments total $26.6 billion over the next five years. While this strategy seems new, other big companies have been doing to same thing for over 20 years, such as, Walmart, Home Depot, Target, the US Postal Service and FedEx.
Since shutting its IPO and laying off 20% of its employees in November, WeWork has yet to slow down. In the fourth quarter of 2019, the company leased an additional 441,000 square feet, which includes a lease of 360,000 square feet at 437 Madison. In Manhattan alone, they leased a total of 8.2 million in 2019, which made them the biggest office tenant beating JP Morgan by almost 3 million square feet. However, these newest additions can still cause WeWork more financial troubles – but WeWork says “it’s all a part of the plan.” New Executive Chairman Macelo Claure, created a six-point plan that included focusing on the core business of office rental rather than WeWork’s side projects, such as its school and wave pool business. Last month, WeWork was secretly trying to get out of numerous deals, including by selling the workplace management company Managed by Q. The company’s occupancy rate declined to 79% in the third quarter of 2019. By 2023, Claure wants WeWork to be free cash flow positive, but expanding could make that harder.
Retail Chain Closures Hi 12-Year High in NYC In 2019, there was a 3.7% decline in the number of chain stores throughout the five boroughs; this is the largest year-over-year drop in national retail locations in the past 12 years. Fast, casual, healthy food chains are growing while less, savvy food chains are decreasing. Chain stores in NYC decreased to 7,832 stores in 304 locations. In 2018, the city only lost 27 chain locations.
Retailers that have suffered: · Subway with 43 locations · Mattress Firm with 20 locations · Rite Aid with 58 locations · Payless with 71 locations · Petland Discounts with 60 locations