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New San Diego Distribution Hub Could Be Latest Salvo in Amazon-Walmart Delivery Wars

E-Commerce Titan Reportedly Plans Large Facility in Southern San Diego County.

Photo Via: RIS

Retail titans Amazon and Walmart have recently ratcheted up their ongoing battle for customers, with next-day delivery service the latest weapon being exchanged. That's playing out in San Diego where Amazon could be looking to further escalate the quick-delivery wars by building a large new distribution center, which would be yet another physical expansion among several announced in multiple U.S. cities by the Seattle-based e-commerce giant.

A government spokesman for the county of San Diego told CoStar News that planners have been told verbally by the developer that Amazon is the planned tenant for a 2.6 million-square-foot distribution center slated to be built by Atlanta-based developer Seefried Properties on a 65-acre property at Otay Mesa Road and Enrico Fermi Drive that the developer has acquired in the unincorporated part of the south county community of Otay Mesa, near the U.S.-Mexico border. Amazon's name is not listed on submitted documents.

The San Diego Business Journal, citing a knowledgeable source who heads a local property owners association, first said Amazon is the intended tenant. Amazon and Seefried officials did not immediately respond to requests for comment from CoStar News.

David Wick, chairman of the East Otay Mesa Property Owners Association, told the Business Journal that Seefried acquired the property to build a distribution center for Amazon. Plans submitted by the developer to San Diego County planners, for a four-story building with 1,854 parking spaces, do not mention a specific tenant – the facility is referred to only as "Project Arcilla." According to its website, Seefried has completed other similar projects for Amazon, including a 1 million-square-foot facility in Macon, Georgia, and a similar-sized project in Salt Lake City.

CoStar data indicates Amazon currently operates four distribution centers in San Diego County, positioned to serve different geographical areas of the sprawling region. Its current South County distribution hub is in National City, with a North County facility in Carlsbad and two others in the city of San Diego – one in the coastal neighborhood of Point Loma, and the other in the northeastern neighborhood of Rancho Bernardo.

Last fall, Amazon set up a new 85,000-square-foot office in San Diego’s University Town Center neighborhood, primarily housing its workers involved in software development.

If Amazon indeed is planning a brand-new distribution hub in southern San Diego County, it would be the latest in a series of physical expansion moves, including its setup of a second headquarters in Arlington, Virginia, plans for a new air cargo facility in Lakeland, Florida, and another new airhub in Northern Kentucky.

It could also heighten the tensions over quick-delivery between Amazon and Walmart, the nation's largest retailer, which recently announced plans to roll out a new next-day free delivery service for a wide range of general merchandise from, without a membership fee. In a blog post, Marc Lore, chief executive of Walmart’s e-commerce division, said the service would first be available to customers in Phoenix and Las Vegas, followed soon after by those in Southern California.

Walmart’s gambit followed Amazon’s announcement in late April that it would invest $800 million in this year’s second quarter toward making one-day shipping a standard feature of its Prime membership service, which currently offers free two-day shipping.

"Our goal is to evolve the two-day free shipping program into the one-day free shipping program, and we’re making strides on that," Amazon Chief Financial Officer Brian Olsavsky said in an earnings conference call with analysts last month.

In the San Diego market, Walmart has also recently taken on Amazon by bolstering its technology staff, geared largely to areas like grocery delivery, at its regional office in Carlsbad, California.

Article Via: CoStar

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