What’s Next For Real Estate In Amazon’s HQ2 Cities?

Real Estate Property Investors Eye Amazon's HQ2

Build it and they will come — in this case, times two. Apologies for the cliché (some of us miss baseball already), but that’s the story with Amazon and its split decision Tuesday (Nov. 13) on its new headquarters.

The Seattle-based eCommerce operator and cloud computing provider decided to build in both Crystal City, an urban area in North Virginia near Washington, D.C., and in Long Island City, a neighborhood in Queens, New York City. As one can imagine, and as PYMNTS reported, the Amazon move comes with significant incentives.

Nothing Amazon does exists in a vacuum, of course, and that applies to real estate.

According to Redfin, its “agents in both regions are reporting a noticeable jump in calls, emails and tour requests from prospective homebuyers interested in homes in these neighborhoods.” Redfin also said that “online views of homes currently for sale in Crystal City and Long Island City on Redfin.com have skyrocketed. In the week ending on Nov. 11, views of homes for sale in Long Island City were up 1,049 percent compared to the same period a year ago. Views of listings in Crystal City were up 217 percent year over year.”

Amazon Jobs

That data, of course, supports the idea — one that helps make those incentives for Amazon possible politically — that landing such a big firm will bring wider benefits over a general geographical area. The idea, though, is not only that Amazon will create thousands of well-paying jobs.

In New York City, Amazon’s $1.2 billion refundable tax credit is reportedly based on the “percentage of salaries Amazon expects to pay employees over the next decade, or $48K per job for 25K jobs.” In addition, jobs will be created in coffee shops, restaurants, retail stores and with various service providers to support Amazon workers, of course.

“I believe there is a lot of interest from investors who want a property they can rent out to a future Amazon employee, or possibly use for corporate housing,” said Redfin Agent Mara Gemond, who has a two-bedroom condo listed in Crystal City with a view of D.C. “Investors are betting that prices will rise quickly, and they’ll be able to rent or sell for a nice profit once Amazon comes to town.”

The Amazon effect, as it’s often called, has also had an impact on some of those 200 locations that failed to land the split headquarters. Before Tuesday’s announcement on the two new headquarter locations, candidate cities Cincinnati, Ohio and Sacramento, California were reportedly changing workforce development programs to grow talent in the technology realm.

Citi Reaction

Apparently, the Amazon effect can work in the opposite direction as well, according to a CNBC report. Citigroup will move “more than 1,000 employees out of its Queens office tower to accommodate the eCommerce giant.”

The financial institution (FI) had been undergoing staff consolidation in New York City before the Amazon headquarters announcement, with some staff moving to Manhattan. The bank had “already planned a move out of the Queens location, but has accelerated the plan. On Tuesday, the banking giant said it would move 1,100 workers from its tower in Long Island City to other locations in the first half of next year ‘to make room for Amazon.’”

Alexa Apology

Meanwhile, in at least one city that Amazon turned down (Chicago), creative marketing types exacted a bit of benign revenge on the company via its own technology.

According to a local news report from that city (which has better hot dogs and pizza than New York City in any case, according to a Tuesday evening poll of a PYMNTS writer who used to live in the capital of the Midwest), an ad agency used the ‘Please Apologize’ skill on Alexa to make it give a “lighthearted explanation as to why Chicago wasn’t chosen for Amazon’s second headquarters.”

The message goes like this: “Sorry about the HQ2 rejection. But if it’s any consolation, you were the second city we chose. Get it? It’s funny because one of your nicknames is the Second City, and that’s also the name of the comedy institution in your city.”

(Try the veal and please tip your waiter.)

That, of course, is not an official apology from Amazon, though it shows how much interest the company’s headquarter selection had attracted, how dramatic and suspenseful it seemed at times. It was no “Who Shot J.R.?” or, for people who are less advanced in age, no Ross-Emily-Rachel love triangle wedding thing. However, the economic stakes of the Amazon decision were of a much higher magnitude than a hit TV show — and will continue to be so.