(Bloomberg) -- Amazon.com Inc. is selling a vacant Bay Area office complex purchased about 16 months ago, the company’s latest effort to unwind a pandemic-era expansion that left it with a surfeit of warehouses and employees.

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Amazon in October 2021 paid $123 million for the 29-acre property in Milpitas, California, part of a strategy to lock up real estate near big cities that could be used for new warehouses and facilitate future growth. Dermody Properties LLC, a commercial real estate developer based in Reno, Nevada, is buying the property and will convert it into warehouse space, said George Condon, a partner with the firm.

The deal is expected to close by the end of April, and Dermody is looking for warehouse tenants, Condon said.

Amazon is expected to take a loss on the sale of the Metro Corporate Center, according to one person familiar with the terms of the deal, who spoke on condition of anonymity. Another person said the final price is still being negotiated. Condon declined to disclose the sale price.

The Bay Area’s office market has been hit hard over the past two years, as companies pivoted to remote work and gave up real estate to cut costs. Nearly one-fifth of the office market is vacant, according to a fourth-quarter report from CBRE Group Inc. Amazon was likely planning to replace the office complex with delivery facilities, but such development has been stalled across the region owing to new municipal regulations and growing building costs.

“We’re always evaluating our network to make sure it fits our business needs,” Amazon spokesman Steve Kelly said in a statement. “As part of this effort, we’ve made the decision to explore selling the Metro Corporate Center site. We’re happy to remain part of the local community and will continue to deliver for customers from our two delivery stations in Milpitas.”