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Wayfair Abandons Plans For 1.2M SF Warehouse Under Construction In North Houston

Online furniture retailer Wayfair has dropped its plans to open a $133M distribution center and is looking to sublease the 1.2M SF that should be fully constructed by November.


The online furniture seller abandoned the project “due to a change in our business practices,” according to a Wayfair spokesperson quoted by the Houston Chronicle, which first reported the story.

San Francisco-based Prologis is the landlord of the building at 1550 Milner Road, which is set on a 187-acre business park near George Bush Intercontinental Airport.

Wayfair and Prologis had discussed creating a potential tax reinvestment zone with Houston officials. 

The zone could have saved Wayfair about $3.36M, or about 90% of property taxes, over a decade in exchange for operating the fulfillment center and creating 400 full-time jobs, according to the Houston Chronicle. Wayfair was to invest $63.5M and Prologis is investing $70M in the fulfillment center, according to the article.

“We were looking forward to joining the Houston community and thank the city for the incredible partnership and support in this process,” a Wayfair spokesperson said in an email to the newspaper. “We’re working toward subleasing the space so that it can be used by another employer and can contribute to the success of the region. We are no longer pursuing any incentives from the city.”

The pullback comes amid a roller coaster of profits and losses for the e-commerce furniture firm. 

Wayfair failed to turn a profit in its first six years of being a public company. But in 2020, pandemic-fueled interest in e-commerce brought a steep but short-lived surge of sales, the Boston Business Journal reported.

By 2022, cash flow fell back into negative territory and the Boston-based company is considering testing brick-and-mortar stores across Massachusetts to emerge from its slump, according to the article. 

In January, the company announced it would lay off 10% of its workforce, or 1,750 employees, The Motley Fool reported.

Two other furniture retailers are also reducing their fulfillment centers planned for Baytown, east of Houston, the Houston Chronicle reported. 

New York-based Safavieh was going to occupy 1M SF at the AmeriPort Industrial Park, but has reduced that to about half of the space, the article states. Construction on that building at 3200 South FM 565 is expected to be complete in April.

Article, another furniture retailer based in Vancouver, put a 511K SF distribution facility at 7525 Sutton Road up for sublease, the article states.