Which city will be the site of Amazon’s second headquarters? City officials in finalist areas are anxiously awaiting, and some investors are already betting on the winner and snatching up real estate ahead of the announcement or gathering commitments ahead of time so they’ll be ready to pounce once the winner is announced, The Wall Street Journal reports.
“HQ2 is guaranteed to meet three criteria: tech job growth, tech job growth, and tech job growth,” Bryan Copley, co-founder of CityBldr, a Seattle-based real estate startup, told The Wall Street Journal. Copley is raising $100 million to buy residential property in the city that will become Amazon’s second headquarters site. His strategy: Copley plans to use proprietary software that within five minutes can narrow down the best 500 multifamily investments once Amazon announces a winning city. He then plans to make offers on many of those properties.
Amazon announced last year that it planned to invest $5 billion in a second headquarters, bringing up to 50,000 jobs to an area over two decades. Cities across the country have been vying to be Amazon’s chosen city, submitting proposals and tax incentive offers to woo the retailing giant. Amazon has narrowed its list to 20 finalist locations.
Some investors are already investing in sites they think Amazon would want. Ryan Dobratz, co-lead portfolio manager of Third Avenue Real Estate Value Fund, believes the Washington, D.C., metro area is a likely winner, and in particular its Crystal City neighborhood of Arlington, Va. His firm has purchased shares of JBG Smith Properties, a REIT that owns commercial real estate on the Crystal City site. JBG’s Crystal City holdings make it “the most ‘direct’ way to play the Amazon lottery among office REITs,” according to a report from Green Street Advisors, a research firm.
Sales are already booming on residential properties in 10 of the counties Amazon has on its short list, climbing 7 percent year over year in July, according to realtor.com®. Pittsburgh is on that finalist short list, and David Cunningham, an owner of rental properties there, says he has received more calls from interested buyers since Amazon announced its finalists. He says he’s been fielding higher offers now than in the past.
Amazon has vowed to name the location for HQ2 sometime this year. CNBC has even rated and graded each city’s chances for becoming Amazon’s HQ2 pick.
The 20 finalist cities are:
- Atlanta
- Austin, Texas
- Boston
- Chicago
- Columbus, Ohio
- Dallas
- Denver
- Indianapolis
- Los Angeles
- Miami
- Montgomery County, Md.
- Nashville
- New York
- Newark, N.J.
- Northern Virginia
- Philadelphia
- Pittsburgh
- Raleigh, N.C.
- Toronto
- Washington, D.C.
Source:
“Search for Amazon HQ2 Sparks Real Estate Speculation,” The Wall Street Journal (Oct. 22, 2018) [Log-in required.]
