By Kate Snyder
Amazon is giving up more space in the Puget Sound region. The e-commerce giant has finalized a deal with Compass Group USA to transfer the operational responsibilities of a food production facility in Renton, according to information released by the company. King County public records show that the agreement between Amazon and Compass involves a lease assignment and is valued at $12 million with a taxable selling price of $6.9 million.
Located at 601 Monster Road SW, industry reports show that the 164,480 square foot facility has supported Amazon Fresh grocery and Amazon Go convenience stores since its full operational launch in early 2022.
“We’re excited that Compass, a food-service company and existing Amazon Supplier, has taken over operations at this facility to lead ongoing production of our Amazon Kitchen products,” Jessica Martin, Amazon spokesperson, said in a released statement. “This allows us to continue to develop and grow our private-label brands, offering even more high-quality options for customers in store and online.”
The deal is part of Amazon’s strategy in moving production to a third-party vendor in order to align with how the firm produces Amazon Kitchen prepared food in other regions of the country.
The company is also working closely to support affected employees through this transition.
Details on exactly how much space Compass occupies in the facility were not released. Industry reports show that a corporate support office is also located at the site.
The site was originally developed by DCT Industrial after it purchased the property in 2017 for $8.7 million, according to industry reports. Prologis bought DCT Industrial in a multi-billion-dollar acquisition a year later.
Recently Amazon has been making significant changes to its distribution network in the United States. Over the past 16 months, the e-commerce giant has taken the strategic step of withdrawing from more than 14 million square feet of distribution space across the country, according to previous reporting from The Registry. This represents approximately 3 percent of Amazon’s U.S. logistics footprint. Most of the distribution center closures occurred during the latter half of 2022. During this period, Amazon focused on shutting down older, less-efficient facilities. More notably, the company decided to put over 30 of its distribution centers, which were built before 2010, back on the market for lease. This strategic move aimed to reduce operational costs associated with these aging facilities.
