Why Amazon and Walmart Choose to Buy Warehouses Instead of Renting

In recent years, U.S. retail and e-commerce giants have shifted from renting to owning warehouses, building logistics networks for stronger control and lower costs.

Amazon is the best example. After rapid leasing during the pandemic, it slowed rentals in 2022 and focused on property purchases. By the end of 2022, Amazon owned about 22 million sq.ft. of warehouses in North America—double 2020—while leased space grew only 5%. In 2024, Amazon bought a 1.26 million sq.ft. facility in Lancaster and 195 acres in Hesperia for a 2.5 million sq.ft. mega-warehouse, alongside new leases in Jurupa Valley and Ontario.

Walmart and Costco are also investing. Walmart has opened large automated centers in Texas and South Carolina, while Costco operates around 24 self-owned distribution hubs supporting nearly 1,000 stores.

For small cross-border sellers, overseas warehouses remain practical. They enable dropshipping, returns, and faster delivery, but giants prove that long-term stability requires owning logistics assets.

Why Own a Warehouse Instead of Rent?

• Control: Avoid delays and rising costs in peak seasons; Amazon boosted same/next-day delivery by over 65% in late 2023.

• Cost: Ownership avoids rent hikes and supports automation.

• Service: Enables faster delivery promises and better customer experience.

Buy vs. Lease in 2025

Leasing needs less capital but rent keeps rising. By 2023, U.S. warehouse rent averaged $9.72/sq.ft. per year, up 20%. Southern California and New Jersey remain the priciest markets. Buying is costly upfront but more stable—especially in California, where Prop 13 caps property tax growth at 2% per year. Owners also capture property appreciation.

Rising Land Value for Warehouse Development

Demand for logistics facilities is driving up land prices, especially near ports in Southern California and Northern New Jersey. Texas offers growth potential. Following where giants invest often signals the next hot spot.