how many millions are you saving for Amazon HQ

69 Replies

with the final 20 cities released for amazon's new HQ

how many investors do you think are hoarding cash to buy up as much as possible when we know?

also....if anyone is an insider. HIT ME UP  lol

Im saving Zero.  For most of the cities named, Amazon is not going to move the needle.  They expect 50,000 jobs.  Lets say 50% of that is hired from existing population and 50% from migration.  Spread that out over 5 years, and a population increase of about 5,000 extra people per year simply does not mean much for many major cities.  And all these cities that have potential locations for Amazon, it isnt like that land will sit vacant if Amazon does not move there. It will be developed into something else, just not with as big of a buzz word attached.

Russell Brazil, Real Estate Agent in Maryland (#648402), Virginia (#0225219736), District of Columbia (#SP98375353), and Massachusetts (#9​0​5​2​3​4​6)
(301) 893-4635

@Russell Brazil if they, say, move to Los Angeles (long shot but a guy can dream), most folks agree that it will be in the little suburb (where I happen to live and invest) of Santa Clarita.

Yes you are right that Los Angeles as a whole would largely be unaffected, but this would be a big win for Santa Clarita.

And I imagine it'd be a similar story wherever they locate the second HQ.

That being said, I think taking advantage of something like this requires familiarity with the specific location the HQ will be located and is not as simple as, "Oh they're moving to Indy?  Better buy some stuff in Indy now."

If it ends up near me in northern virginia, montgomery county md or DC, I would buy another rental or two for long term buy hold.  

Im very glad to see Chicago on the list. Its nice to see Chicago in a good light other than the usual high tax and politician corruption among other negative media press. Its some great job growth coming to Chicago. I guess all those "Building a new Chicago" signs arent as bad as I thought(it still is for other reasons).

It is extremely rare for me to say this but I disagree with @Russell Brazil .  It is expected to add more than $5,000,000,000 a year to the local economy.

I agree that 50,000 jobs is not huge number for these communities.  The bigger issue is that the average salary will be over $100,000.  In most of the cities on the list that will have a huge impact.

@David Zheng   I am hearing from people I know who have worked at REITs, and builders and now are consultants for hedge funds.  They seem to be giving the same advice to clients.  It is much better to tie up properties now into option or "inspection" periods than waiting for an announcement.

Like you said if anyone works at HQ1 and wants a new friend direct message me. 

Not to mention... Apple HQ2?   WHAT????

Originally posted by @Michael Biggs :

It is extremely rare for me to say this but I disagree with @Russell Brazil.  It is expected to add more than $5,000,000,000 a year to the local economy.

I agree that 50,000 jobs is not huge number for these communities.  The bigger issue is that the average salary will be over $100,000.  In most of the cities on the list that will have a huge impact.

@David Zheng   I am hearing from people I know who have worked at REITs, and builders and now are consultants for hedge funds.  They seem to be giving the same advice to clients.  It is much better to tie up properties now into option or "inspection" periods than waiting for an announcement.

Like you said if anyone works at HQ1 and wants a new friend direct message me. 

 Many of these cities though have huge economies. NYC has a GDP of $1.6 trillion, DC $500 billion, Chicago $600 billion, LA $1 trillion. I think $5 billion might mean a lot to say Columbus Ohio, maybe Nashville but not for the large cities. The smaller cities those salaries will boost things too, buy in NYC or DC, yeah its nice to have it, its just not a game changer by any means.

Also for what its worth, while I dont think it will be a big deal, I am likely to be directly involved with lobbying our local government to push for HQ2 to be here. 

Russell Brazil, Real Estate Agent in Maryland (#648402), Virginia (#0225219736), District of Columbia (#SP98375353), and Massachusetts (#9​0​5​2​3​4​6)
(301) 893-4635
Any of the cities where it is a game changer are off the list. The real question will be if the location is in the city proper or a suburb. It could be a game changer for areas around a suburb. If your "boston" headquarters is 40 minutes out well that might be different for the actual place you locate it in. I think though in city locations no impact except maybe traffic...
Originally posted by @Michael Biggs :

It is extremely rare for me to say this but I disagree with @Russell Brazil .  It is expected to add more than $5,000,000,000 a year to the local economy.

I agree that 50,000 jobs is not huge number for these communities.  The bigger issue is that the average salary will be over $100,000.  In most of the cities on the list that will have a huge impact.

@David Zheng   I am hearing from people I know who have worked at REITs, and builders and now are consultants for hedge funds.  They seem to be giving the same advice to clients.  It is much better to tie up properties now into option or "inspection" periods than waiting for an announcement.

Like you said if anyone works at HQ1 and wants a new friend direct message me. 

 Look at the huge Cener campuses in KC, it raised the prices some in the local areas, but it wasn't anything crazy (or at least crazy by CA appreciation standards).

https://www.bizjournals.com/kansascity/news/2017/0...

I'm not saying it didn't help, but housing ALL OVER KC is already hot and has been (I'd argue OOS investors dumping money drives prices more than a company).

If you want to deep dive it, it all started around 03

http://www.kansascity.com/news/business/development/article334952/Cerner-seals-the-deal-on-4.3-billion-office-plan-at-Bannister-site.html

As someone with a view of about 20 cranes in South Lake Union right now, I find it absurd to think that 50k Amazon jobs won't have a massive impact on whatever city HQ2 end up in. Those 50k jobs have the potential to create tens of thousands of additional jobs. South Lake Union could be considered a city within Seattle that Amazon half built. 

You'll have tons of construction jobs. Tons of hospitality jobs for all the new restaurants and entertainment that will need to be built to fit the demand of all those high income earners. Tons of partners, consultants, consultants moving there to be next door to Amazon. The list of ancillary jobs that will come along with HQ2 is massive!

@Ryan Evans , I agree.  Amazon currently employs 40,000 people in Seattle, up from about 5,000 seven or eight years ago.  That means that it has hired 35,000 people in the city in that time.  To say that Amazon has done anything less than fundamentally transform the city since then is simply wrong.  Hiring 50,000 people in a new location in just five years will similarly transform almost any city Amazon chooses, with only one or two exceptions (e.g. LA).  

Take Boston, for example.  Roughly the same population and roughly the same land area as Seattle.  A new campus drawing top, highly compensated talent will change everything about that city in the same way that Seattle has seen lurching advances in housing quality and prices, public amenities, tax dollars, and social tension, not to mention the explosion of satellite commerce in the service industry, plus startup activity that leaks out.

And that's just the first five years!

I am surprised like the author San Diego did not make top 20 cut. 

There are obviously 3 stand outs here and I can chuck in 4th.

LA = media connections

NYC = talent connections

ChiTown = talent and perhaps value connections?

D.C. = political connections.

The rest seem 2nd tier-ish when compared and good luck to all!

@Matt R. NYC actually does not have a whole lot of software engineering connections. Both NYC and Chitown is for finance/business. 

Originally posted by @Helen Zhang :

@Matt R. NYC actually does not have a whole lot of software engineering connections. Both NYC and Chitown is for finance/business. 

 Yes they are more well known for that however both have growing tech hubs. NYC has silicon alley and tons of start ups and Chitown is top 10 tech hub globally and growing fast. I think a portion of this is also to attract new talent. 

Originally posted by @Russell Brazil :

Im saving Zero.  For most of the cities named, Amazon is not going to move the needle.  They expect 50,000 jobs.  Lets say 50% of that is hired from existing population and 50% from migration.  Spread that out over 5 years, and a population increase of about 5,000 extra people per year simply does not mean much for many major cities.  And all these cities that have potential locations for Amazon, it isnt like that land will sit vacant if Amazon does not move there. It will be developed into something else, just not with as big of a buzz word attached.

I think Russell is correct that the overall population of a city will not change much, and most of the cities mentioned already have strong economies.  However, I do think it will have an impact on the home prices in the suburbs of the HQ2 city.  They will be moving more high income jobs into the area, and create (at least in the short-term) changes to the migration pattern for that area as it would be more desirable.  It could be a decent appreciation play if you guess right, but if you buy after its announced you might be buying into a mini-bubble.

When you have a place like Indianapolis that already has a thriving market for both flips and holds the prospect of Amazon is just the icing on the cake.

@Michael Biggs Apple announced it's third site, so in addition to Cupertino and Austin, they are adding a new location and 20,000 jobs. Apple isn't going to have a public competition like Amazon.

@David Zheng The 50,000 high paying jobs will transform any city. People forget that it is not just those jobs. It is all the construction jobs. It is all the businesses that benefit from those 50,000 people spending money with them. Those businesses need to hire more people. The schools need to hire more teachers, city hires more police, etc. It becomes more than 50,000 jobs. 

One think people aren't discussing is where those people come from. We can expect some talent migration, so some cities will lose people. It will have an effect on the Seattle real estate market. It will remove pressure which could mean prices stabilize or even drop. The point is, if you were planning to sell in Seattle, now may be a good time. If you are looking to buy, maybe hold off a little bit.

As far as insider information, I just have my hunches. I am predicting it is in the Southeast. Atlanta, Austin, Raleigh or Miami. My reasoning is that it only makes sense to locate further to the east and south for warmer weather. My top prediction is Austin then Raleigh then Atlanta. Total guess, but I am an Amazon Prime Member, so I do have certain Amazon credentials.

Originally posted by @Joe Splitrock :

@Michael Biggs Apple announced it's third site, so in addition to Cupertino and Austin, they are adding a new location and 20,000 jobs. Apple isn't going to have a public competition like Amazon.

@David Zheng The 50,000 high paying jobs will transform any city. People forget that it is not just those jobs. It is all the construction jobs. It is all the businesses that benefit from those 50,000 people spending money with them. Those businesses need to hire more people. The schools need to hire more teachers, city hires more police, etc. It becomes more than 50,000 jobs. 

One think people aren't discussing is where those people come from. We can expect some talent migration, so some cities will lose people. It will have an effect on the Seattle real estate market. It will remove pressure which could mean prices stabilize or even drop. The point is, if you were planning to sell in Seattle, now may be a good time. If you are looking to buy, maybe hold off a little bit.

As far as insider information, I just have my hunches. I am predicting it is in the Southeast. Atlanta, Austin, Raleigh or Miami. My reasoning is that it only makes sense to locate further to the east and south for warmer weather. My top prediction is Austin then Raleigh then Atlanta. Total guess, but I am an Amazon Prime Member, so I do have certain Amazon credentials.

Ha, I wonder if being an Amazon Prime Member would help land one a sweet job too. :)

I agree with most of this, except I don't think it will have much of an effect on Seattle.  Amazon is growing like a weed.  They aren't going to be downsizing in Seattle.  The 2nd HQ is due to the fact that Seattle just can't handle that type of growth from Amazon as the Company already has 20% of the City's office space.  Growth may moderate or stabilize like you say.

Also, I think people need to understand the cloistering effect of a major tech headquarters like this has on an area.  This isn't like opening a factory.  These big companies tend to result in other companies opening satellite offices to do business with them and share in talent sometimes too.  Also, new tech companies tend to be started by people who leave out of bigger companies, and Amazon already has a reputation as a very demanding place to work.  Finally, tech flourishes in tech hubs where people interact from different companies and groupings.  That is why you don't see tech companies move to smaller cities or off on their own somewhere.

One example is the comparison of Albuquerque and Seattle when Microsoft moved the company from Albuquerque to Seattle in 1979.  They had very similar economies at the time and Seattle could be quite depressed depending on how Boeing was doing.  Today, Seattle looks more like a San Francisco economy than Albuquerque.  A lot of that is due to other companies opening up satellite tech offices in the area and new companies like Amazon forming.

My prediction is Pittsburgh, PA.

The city fulfills every the Amazon requirements for the second headquarters and has the skilled labor force required by Amazon. The social and cultural scene is great. The population is very diverse(ethnically, culturally, and socially). Amazing NFL and NHL franchises. Pittsburgh is a blue city with affordable real estate. It  is served by major interstates and expressways. It is near major cities in several states(cities that are 250 miles or less of Pittsburg: Cleveland, OH,  Columbus, OH, Baltimore, MD, Washington DC, Buffalo, NY). Good international airport that has multiple nonstop flights to various major cities( Seattle is not yet included but surely will be if Amazon picks the city). Numerous tech companies are already installed in the city, including Uber. Carnegie Mellon University is one of the premier universities with one of the top global robotics university departments. Investors are already buying multifamily houses and apartments at a rapid pace. Finally, Jeff Bezos has always been a trailblazer, he wants a place that he is not going to share with other Tech companies(Microsoft in Seattle) . Believe it or not, Pittsburgh, PA has it ALL. 

Even if Amazon does not select this city, it is poised for tremendous growth in the next two decades.

I, myself would love to invest there so I am looking to chat/meet with people interested in investing in Pittsburgh before Amazon releases the winning city.  

Cheers,

@JC Foumena   I think all of the cities might be "blue."  One thing to remember is Jeff Bezos loves Miami.

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