Online retail and tech juggernaut Amazon doubled its office footprint in the college town submarket with a 123,000 square foot lease to The Collection at UTC.

The lease, which includes brand new offices on the second and third floors of two newly erected buildings at the east end of the mall, was confirmed by researchers at property tracker CoStar. It would be the third-largest lease in San Diego in the first three months of the year, behind leases signed by Neurocrine Biosciences and Bristol Meyers Squibb.

“My theory is that Amazon is following Apple, because Apple is a big cloud customer. Apple has leased over a million square feet from (University City). … It makes sense to add space so that ‘they can take care of their customer,’ said Joshua Ohl, local director of market analysis for CoStar.

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Amazon did not respond to a request for comment on the lease.

In University City, the e-commerce giant already leases about 130,000 square feet of office space at 10300 Campus Point Drive. Amazon also leases 181,000 square feet of office space at 16550 Via Esprillo in Rancho Bernardo, according to CoStar. It also operates more than 5 million square feet of distribution and warehouse centers in the county, with more facilities on the way.

Amazon is taking up residence at The Collection at UTC, which opened in October last year but has remained largely vacant. The company is likely interested in the space for its Amazon Web Services division and could house around 800 workers in the new facility, Ohl said.

The mall space provides workers with downtown-style conveniences in a suburban environment and collocates them alongside their high-tech peers.

“There are few places that can offer the same amenities. Just think of the freeway accessibility, the beautiful upscale apartment communities in the area — not to mention all the restaurants and retail right there,” Ohl said. “And you have the luxury of not being (downtown).”

The Collection at UTC is the first phase of reimagining the old Sears plot. The new development is a 226,200 square foot mixed-use center with a three-story North Building and a two-story South Building, separated by an open-air corridor. It is a joint venture of Seritage Growth Properties and Invesco Real Estate, who together own the former 12-acre Sears parcel which includes the new buildings, surrounding parking lot and enclosed automotive center.

As lead developer, Seritage initially sought to create a dining, working and playing environment that would extend the already bustling atmosphere of the adjoining Westfield-owned mall. The vision remains true to some degree, although it has transformed with Amazon anchoring the two-building development. The owner-developer had previously signed leases with boutique fitness operator Equinox, co-working brand Industrious and bowling alley restaurant Pinstripes, but these were dropped.

Seritage Growth Properties and Invesco Real Estate jointly own 12 acres of land at the east end of the mall. In addition to The Collection, the companies are working to secure rights to turn 8.5 acres of parking space into “potentially millions of additional square feet of uses for life sciences, offices and residential homes”.

(Eduardo Contreras/The San Diego Union-Tribune)

Seritage is now moving forward with Amazon and a ground floor-only retail approach that includes CB2, Blue Bottle Coffee, Pacific Catch and Madison Reed. The change in management was made possible by a late 2021 amendment to the mall’s main planned development permit, which increased the office area permitted on the property.

Seritage did not respond to a request for comment on Amazon’s lease or its plans to redevelop the rest of its holdings at UTC.

A publicly traded real estate investment firm, Seritage was spun off from Sears in 2015 when it bought out the retailer’s stake in more than 250 physical storefronts for $2.7 billion. The company is currently in the process of converting to a C corporation for tax purposes. The company’s portfolio currently includes 162 properties and 19.2 million square feet of space, as of the end of 2021.

He envisions the greatest potential for redevelopment of the parking space he owns alongside The Collection. The company is working to secure rights to turn 8.5 acres of parking space into “potentially millions of additional square feet of life science, office and residential uses,” according to a March press release.

Amazon is paying $5.70 per square foot, plus expenses, according to Seritage’s release, which references the lease but does not mention Amazon by name. The company also noted that The Collection is 83% leased, with 39,000 square feet of retail space still available.