Amazon doubled the amount of space it owns in 2017

Key Points
  • Amazon's physical footprint, which includes office space, data centers, and warehouses, increased 42 percent in 2017 to 254 million square feet.
  • Amazon has been heavily investing in warehouse expansion to meet growing demand for fast delivery.
  • That's all before the company begins construction of a new headquarters.
A worker stacks boxes inside of an Amazon fulfillment center in Robbinsville, New Jersey.
Lucas Jackson | Reuters

As Amazon grows, its physical footprint is rapidly expanding through physical stores, massive warehouses and data centers.

Amazon disclosed in its annual report on Friday that its physical properties — office space, physical stores, warehouses, and data centers — now span 253 million square feet, up 42 percent from the previous year.

Most of that space is leased, but the amount that it owns almost doubled in 2017 to 14 million square feet from 7.2 million a year earlier.

Amazon has been heavily investing in warehouse expansion lately to meet growing demand for faster delivery. Having more warehouses across the country makes it easier and less costly to deliver products. Amazon CFO Brian Olsavsky said the company added roughly 30 percent to its warehouse square footage in each of the past two years.

And that's all before Amazon gets started on the development of HQ2, or its second headquarters, which the company estimates will cost $5 billion to construct and bring in 50,000 "high-paying jobs." Last month Amazon narrowed the list of HQ2 candidates to 20 locations.

At the end of December, Amazon had 566,000 full-time and part-time employees, up 66 percent from 2016.

Amazon HQ2 search: Newark, New Jersey vs. New York City
Amazon HQ2 search: Newark, New Jersey vs. New York City

Amazon's physical growth in 2017 was faster than the previous two years, in part because of the acquisition of Whole Foods and its 472 stores. Amazon now leases more than 20 million square feet of space for physical stores.

Capital expenditures in 2017 jumped to $10.1 billion from $6.7 billion in 2016. In addition to capacity for fulfillment center, Amazon said much of the growth was for technology infrastructure to support Amazon Web Services. More than 80 percent of Amazon's space consists of warehouses and data centers.

Total footprint growth of 42 percent last year marked an acceleration from 32 percent In 2016 and 18 percent in 2015.

Even with all that expansion, warehouse congestion remains a growing headache for Amazon. To help solve the problem, Amazon recently launched a new trial program called FBA Onsite, which lets Amazon get dedicated space within the seller's warehouse.