Two years ago, Chicago was a long-shot contender for a second Amazon headquarters. While the coveted HQ2 office assignment went elsewhere, the city, and Illinois at large, are proving to be a key component in the e-commerce giant’s supply chain.
Calculating how much the company has spent on local fulfillment centers, cloud infrastructure, research facilities and employee compensation, Amazon has invested over $4 billion in Illinois over the past decade. And while the firm may seem ubiquitous and integrally woven into the state’s logistics network, they have only heavily focused on distribution space here during the past five years.
Amazon’s warehouse spree began in 2016 with the opening of 700,000-square-foot and a 750,000-square-foot fulfillment centers in Joliet and Romeoville, respectively. The next year, they opened three more facilities—a 626,800-square-foot non-sortable warehouse in Waukegan, an 850,000-square-foot facility in Monee and the 438,150-square-foot Crest Hill facility. The company opened a 1-million-square-foot warehouse in Aurora in 2018 and broke ground last October on a similarly sized facility in Channahon.
In total, Amazon currently operates 17 facilities throughout Illinois, employing 18,000 individuals. And they’re not done yet.
Prologis redeveloped a 23-acre site in Chicago’s Bridgeport neighborhood into a 112,000-square-foot warehouse. Last month, Amazon agreed to lease the entirety of the modest riverside property, which features 11 truck loading docks and 449 parking spaces. The facility will serve as a last mile asset, in addition to an already extant Goose Island property and other projects that Amazon plans to unfold within the city limits at sites such as Gage Park, McKinley Park and Pullman.
These Illinois plans also include a step toward the future. This past June, Amazon announced that it will build two new robotics fulfillment centers in south suburban Matteson and Markham. The first of their kind in Cook County, these properties will use the latest generation of robotic pickers to help sort and ship goods ordered online. Seefried Industrial Properties will build the two, 850,000-square-foot fulfillment centers.
However, not all are welcoming of the company’s activities. Amazon typically leases its warehouse space, as this allows them to be nimbler and operate with wider geographical impact. They do occasionally buy their own properties, such as a Bolingbrook asset that they acquired in January for $50.5 million.
The property was once the location for a failed indoor amusement park, Old Chicago, and more recently a car auction operation. Though the project would uplift the site and bring an estimate 1,500 jobs to his community, Bolingbrook Mayor Roger Claar opposes the development. His largest concerns are the low wages that associates would be paid, a rise in truck traffic and the unsightliness of the new warehouse.
The decision-making that went into each of these real estate plays occurred during pre-pandemic times. With the onset of COVID-19—and more importantly, the uptick in online shopping it has incurred—the runway for logistical warehouse space has only gotten longer. Will e-commerce’s biggest player, Amazon, continue to invest in Illinois?