Amazon Takes A Further Bite Out Of The Big Apple, Closing Purchase Of 600,000 Square Feet At 522 Fifth Ave.

Amazon AMZN) can't get enough of the Big Apple. Weeks after the company announced a 330,000-square-foot lease signing at 10 Bryant Park, news has broken of another major real estate deal involving the tech behemoth. On May 2, the company closed on the purchase of 522 Fifth Ave., The Real Deal reported.

Amazon's latest Manhattan expansion involved purchasing the 600,000 building from owner Aby Rosen's RFR Realty. Although no purchase price was disclosed, it could have been an opportune investment for Amazon as 522 Fifth Ave. had been mired in financial problems and facing foreclosure, The Real Deal reported. According to AI Invest, the $224 million debt that necessitated the foreclosure was acquired by SL Green Realty at a discount. 

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A Commitment To Physical Office Space

Amazon's recent Manhattan office purchases underscore the company's commitment to physical office space. Its shopping spree began with the $1 billion purchase of Lord & Taylor's flagship building at 424-434 Fifth Ave. between West 38th and 39th streets, now Amazon's headquarters, and a string of other high-profile Manhattan purchases, including the recent 10 Bryant Park lease. 

Why Amazon Is Expanding In Manhattan 

AI Invest reported that Amazon's relentless Midtown Manhattan expansion policy relies on three core principles:

1. Location: Its proximity to transportation and other offices has created an urban campus that also accommodates CEO Andy Jassy's hybrid work model.
2. Employee Retention: High-end, attractive office spaces in the midst of one of the most bustling, vibrant cities in the world, with 17,000 square feet of outdoor space, boosts the employee experience.
3. Long-Term Growth: Amazon now controls 1.5 million square feet of office space, which places it at the heart of New York's tech talent. This location also fits with its $15 billion warehouse expansion plan, which includes major U.S. cities, robotically run fulfillment centers, within a mile of final delivery points.

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Prestige

Amazon's newest acquisition at 1522 Fifth Ave. is a Beaux-Arts building dating back to 1862. It adds a level of timeless prestige that could appeal to top-tier talent. It is also a bold bet on the resurgence of New York's office life.

National Expansion

New York City isn't the only area Amazon is expanding into. The company said on April 30 that it plans to spend approximately $40 billion by the end of 2026 to bring faster shipping times to rural America, adding over 200 delivery stations and tripling the size of its existing rural network. In a statement, the company said it would cut shipping times "in half."  

"At a time where many logistics providers are backing away from serving rural customers because of cost to serve, we are stepping up our investment to make their lives easier and better," Udit Madan, Amazon's senior vice president of worldwide operations, said in the statement.

The company said that each new facility would create 170 new jobs. The expansion in dense urban centers like Manhattan and rural areas is part of an overall strategy to speed up deliveries, CNBC reported, in some cases to just a few hours.

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