How will Amazon’s HQ2 affect the selected city’s CRE market?
Amazon.com Inc. recently narrowed down their list of candidate cities for their new headquarters from 238 to a 20-city shortlist.
The culled-down list includes some predictable choices like New York, Boston, Chicago, Atlanta, Dallas, Austin and Toronto, as well as smaller cities like Tulsa and Memphis. The list also includes broad regions like Montgomery County, Maryland and Northern Virginia.
What will Amazon bring to the selected city?
Amazon promises to bring 50,000 high-paying jobs to the selected HQ2 location over the course of a decade. Over that time, these new jobs could create a major boost in the economy for the selected city, and in turn, a boost for specific industries, such as CRE.
And while not as heavily publicized as Amazon’s location bid war, Apple also recently announced that it plans to build an HQ2 somewhere in the United States. Apple spokespeople have said they plan to hire 20,000 new employees for that campus.
What does an HQ2 mean for the selected city’s CRE market?
With these new HQ2s, two cities could see a surge in their overall economy, and as a result, the CRE market, within the next couple of years. Because the new campuses will be so large, they likely won’t be able to simply take over existing spaces within city limits. Depending on the selected location, entire new mini-cities may be built near the campuses.
Specifically, new multifamily dwellings and retail near the new headquarters could be a huge opportunity for investors. Those investors will likely want to get in early while HQ2 construction is underway. Brokers in the city where the new headquarters are located could see an uptick in business as those investors make moves to take advantage of the influx of jobs, and workers, to the area.
Both Amazon’s and Apple’s final location decisions are set to be announced later this year. Subscribe to our newsletter to receive updates on how current events will affect the CRE industry.