(Bloomberg) -- Amazon.com Inc. is scrapping a major office expansion in Jersey City in a blow for landlord Mack-Cali Realty Corp.
The technology giant had been close to a lease with Mack-Cali for roughly 400,000 square feet (37,000 square meters) of space on the New Jersey waterfront, Bloomberg reported earlier this month.
The deal, which had been discussed for months, fell apart after Amazon backed out at the last minute, according to people familiar with the matter.
Shares of New Jersey-based Mack-Cali declined on the news. The stock was down 3.3% at $18.81 as of 10:57 a.m. on Tuesday. It had gained 56% this year through Monday.
A representative for Mack-Cali declined to comment. Amazon didn't immediately respond to a request for comment.
The move is a big setback for New Jersey's office market, which has been hammered by the pandemic. The market had an availability rate of 19% in the third quarter, the highest since 2005, according to brokerage Avison Young.
Read more: Amazon in Talks to Lease JPMorgan Tech Space Near Hudson Yards
Seattle-based Amazon's plan to build a headquarters in Queens collapsed in 2019 amid political backlash to subsidies tied to the project. Since then, the company has been expanding in New York. It bought the Lord & Taylor building last year, announcing plans to add more than 2,000 workers in the city.
The company, founded by Jeff Bezos, is developing a second headquarters in northern Virginia. The new offices, designed as a hub on the East Coast for the e-commerce giant, will be in Arlington, just outside Washington, D.C.
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