Looks like Amazon hq2 is NYC and VA

Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes

I just read it looks like HQ2 is going to NYC and Virginia. NYC for talent attraction and VA/DC for politics is my guess. Thoughts?

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Russell BrazilBusiness Member

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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

Originally posted by @Aaron Taylor:

From a pure financial standpoint when you can pick anywhere in the US to build, those two areas seem like odd choices. It's kind of like having the whole US as an option to buy rental property and then buying in the most expensive areas. Obviously it must be non-financially driven to some degree. But what do I know, lol.

I also think that huge headquarters may start to go by the wayside in the future. I live in the midwest, and I've noticed that companies in expensive areas are starting to recruit people to work from home remotely rather than pay someone locally. Like a person in Kansas might be 25% to 50% cheaper than someone in Cali doing the same job. I think that trend is going to continue in the future as companies shrink their offices and hire remotely. I know of two engineers in the last month that were recruited to work at home from now on.

DC makes perfect sense to me as a DC area resident. Cheap housing when measured against income. Sure while we are the 5th or 6th most expensive market, we also make the most money by far making housing very affordable. Housing prices are only about 4 times our income, placing us outside the top 20 most expensive markets when measured against income.

We have the highest percentage of bachelors, masters, and doctoral level degrees by far. Sonhighly educated work force. We also have a culture built around work and careers here.

Biggest tech workforce outside the bay area.

We have a large amazon presence already, and the backbone of the entire internet is here in DC with 70% of the entire internets traffic driving through our data centers.

We have a great public transportation system. We have 3 major airports. We have some of the best school systems in the country.

Bezos owns the Post and the most expensive house in DC...and of course easy access for lobbying. Marriott, Northrop Grumman and many other companies have certainly found it beneficial to be here for the purposes of lobbying

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Amit P.
Las Vegas, NV · Member since 2018 · 49 posts · 40 votes
7y
If I'm Bezos and I have 200+ cities willing to give me tax breaks, then of course I take more than one of the proposals. But in reality, I'd take 10 or more of them and place warehouses and other smaller offices in each and then never pay taxes. Wouldn't suprise me if HQ2 and HQ3 turn into more.
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Amit P.
Las Vegas, NV · Member since 2018 · 49 posts · 40 votes
7y
Apparently the original RFP had the language that it could pick multiple proposals:
"This RFP is only an invitation for proposals, the substance of which may be memorialized in a binding, definitive agreement or agreements if any proposal is selected. Amazon may select one or more proposals and negotiate with the parties submitting such proposals before making an award decision,or it may select no proposals and enter into no agreement."
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Jeff Hanna
Member since 2018 · 1 post · 2 votes
7y
@Russell Brazil I agree with both of you gentlemen. I have worked a federal job for a while now and have been watching Amazon get closer and closer to us. The government and D.C. makes sense because it's the most constant pour you can get as long as you can pay to play (an Uncle Eric reference there). I can also tell you that not only finding cleared people has been a strain on Amazon here in Seattle. They have been hurting for folks bad enough they're offering six figures for cleared folks with current polygraphs and ZERO IT experience. Maybe, along with headquartering next to competitors (Lockheed, GD, Danaher, etc.), they're looking to try and pull from the pool of cleared personnel in D.C. Just spit balling here, but with the little I know it makes sense to me.
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Leah M.
Investor · Newton, MA · Member since 2016 · 25 posts · 4 votes
7y
Seems like the whole hq2 was a game to extract tax breaks and concessions from NYC and Washington DC, which had been preselected from the start. You don't really need to scour across the United States in order to land up with DC and NYC. Amazon intended from the start to set up second headquarters in a supercity where Bezos btw already owns homes.
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Travis Darden
Rental Property Investor · Indianapolis, IN · Member since 2015 · 46 posts · 16 votes
7y
@Eric Giovannucci, no it’s in Crystal City, which basically Arlington. Right next to DC. Not close to Richmond.
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Henri Meli
Investor · Morrisville, NC · Member since 2012 · 1k+ posts · 673 votes
7y
Having a Bachelor degree or a Master degree doesn't necessarily means that one has the skills required to work for Amazon. I feel that the move to DC/NYC is a for them to get closer to Government money as well as Financial center in NY.
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Nathan Wankel
Investor · Denver, CO · Member since 2018 · 57 posts · 30 votes
7y
Darn, I was hoping the 2nd HQ would be in Denver.
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Nick Walters
Rental Property Investor · Greenwich, CT · Member since 2009 · 39 posts · 5 votes
7y
@David Zheng LIC has been booming for a few years now.
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Nick Walters
Rental Property Investor · Greenwich, CT · Member since 2009 · 39 posts · 5 votes
7y
@Aaron Taylor Amazon will attract the top talent in the world with HQ2 in NYC.
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Rich Lopes
Rental Property Investor · San Jose, CA · Member since 2016 · 114 posts · 54 votes
7y
The VA choice was obvious given that Google is no longer bidding for $10B defense contract. Amazon lIkley to snatch that and they need to be closer to Pentagon https://www.google.com/amp/s/techcrunch.com/2018/10/08/google-will-not-bid-for-the-pentagons-10b-cloud-computing-contract-citing-its-ai-principles/amp/
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Cody L.
Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
7y
Originally posted by @Lesley Resnick:

These decisions have to be politically motivated. They do not make economic sense. Companies are leaving these areas not moving in. They are already too expensive. LIC is great because it is 39 sq ft as opposed to 57 for Manhattan.
In terms of pure economics, moving to a location like the Leigh Valley or West Virginia would seem to be a more sensible choice. Land and labor are significantly cheaper and will not price most of their employees out of the area due to the cost. Further, some of these areas would offer tax breaks and building concessions.
From a purely speculative approach, you could make money buying property in these areas.
Correct, they want a place that's 'pure' in it's blue area credentials. I love amazon, but honestly sometimes I wish there was a competitor as they're able to stick their finger in the eyes of half the country with some of their comments and it's not like anyone can go to "the other amazon". There is just "amazon"
I will say though -- that company -- from the prospect of what service I see as a customer, is damn near perfect.
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Cody L.
Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
7y
I'd like to know why the moderators on this thread removed my reply to the guy who trashed basically all of middle america. He says: "They wont find the people who can actually do the jobs they need done in Little Rock Arkansas or Tupelo Mississippi."
which to me is a disgusting thing to say. I reply somewhat forcefully. My reply removed. But his is fine. Odd
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Rich V.Pro Member
Atlanta, GA · Member since 2016 · 81 posts · 45 votes
7y
The MTA cannot handle 50k more riders and our lungs cannot handle anoymore pollution. Please don’t come to NYC.
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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
7y
Originally posted by @Cody L.:

I'd like to know why the moderators on this thread removed my reply to the guy who trashed basically all of middle america. He says: "They wont find the people who can actually do the jobs they need done in Little Rock Arkansas or Tupelo Mississippi."
which to me is a disgusting thing to say. I reply somewhat forcefully. My reply removed. But his is fine. Odd
I wasn't the mod that removed it but personal attacks will always be removed if they are seen or reported. His statement concerned the [relative] level of education of an area with regards to the jobs needed. Your "somewhat forceful" reply was a personal attack. If you had left off the first part of your post, the rest of it would have been left alone. Occasionally a mod will edit out the personal attack and leave the rest of the post if it seems to add to the conversation, but I can see that in this case it was only going to fuel a food fight in the forums.
Also: if you have a question about the moderation of a post, please message a moderator directly rather than bring the issue up directly in the thread. That causes an unnecessary detour from the course of the conversation.
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Syed H.
Developer · NY/NJ/PA · Member since 2018 · 758 posts · 935 votes
7y
Originally posted by @Lesley Resnick:
These decisions have to be politically motivated. They do not make economic sense. Companies are leaving these areas not moving in. They are already too expensive. LIC is great because it is 39 sq ft as opposed to 57 for Manhattan.
In terms of pure economics, moving to a location like the Leigh Valley or West Virginia would seem to be a more sensible choice. Land and labor are significantly cheaper and will not price most of their employees out of the area due to the cost. Further, some of these areas would offer tax breaks and building concessions.
From a purely speculative approach, you could make money buying property in these areas.
Companies don't look at just the cost of the rent. Their biggest expense is their employees. That's why companies will pay massive premiums even within NYC to get prime spaces to entice their employees and hoping for increased productivity and keeping them happier/healthier. For Example, A company who I won't name has a massive HQ inside Manhattan for about $90/sf. That's just the face rent. That space costs them roughly $600-$700/sf when u add employee cost and other expenses to run the property.
Companies are not leaving these areas. Back/mid offices are leaving Manhattan, but front offices are still here and growing. Tech has been growing here for years.
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Syed H.
Developer · NY/NJ/PA · Member since 2018 · 758 posts · 935 votes
7y
Originally posted by @Cody L.:

I'd like to know why the moderators on this thread removed my reply to the guy who trashed basically all of middle america. He says: "They wont find the people who can actually do the jobs they need done in Little Rock Arkansas or Tupelo Mississippi."
which to me is a disgusting thing to say. I reply somewhat forcefully. My reply removed. But his is fine. Odd
Why are you so offended? What did he say that was so wrong?
Companies need educated employees to do the tasks they require. Finding talent is immensely hard on a large scale. It's not an opinion, but a fact, that it is much easier to find that talent, at scale, in bigger cities/msas mostly in Coastal America.
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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
7y
Tupelo and Little Rock are examples of America with fairly average incomes and educational achievement. Neither of which could support HQ2. Tupelo has a population that is smaller than the projected work force of HQ2. The DC area has more workers in the science/engineering field at 325k than the entire population of Little Rock at 200k.
Particular industries are going to pool in certain areas of the country because of the population of that area, then which also becomes self reinforcing.
I dont think people in Charlotte are better at math because banking pools there. I don't think people in Boston are healthier because healthcare pools there.
But if Im a large tech company looking for a large work force, then yeah DC, NYC, Bay area make a lot of sense. If Im starting a hedge fund, then NYC makes sense. If Im starting a mortgage company then Detroit makes sense. If Im starting a credit card company Deleware makes sense. If Im starting a movie production company then LA makes sense. If Im starting a law firm built around international trade then DC makes sense. If Im starting an energy company Houston or Tulsa make sense.
Becase the populations of those cities have the work force to support those types of companies. Could you start any company any place? Sure. But are your chances of success when dealing on a large scale going to be higher if the work force exists in a particular location to then place that business in that location. Absolutely.
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Bryan Clement
Rental Property Investor · Union, ME · Member since 2018 · 161 posts · 104 votes
7y
@Joseph Salegna I thought that LaGuardia was being re-developed? Wonder if that is affecting Amazon's decision to locate there.
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Angel Perez
San Diego, CA · Member since 2016 · 33 posts · 15 votes
7y
Is there an expected date when this HQ2 hunt is going to be finalized?
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Account Closed
Rental Property Investor · Member since 2018 · 51 posts · 7 votes
7y
Amazon's move to New York is a clear signal that they have sights set on expanding into banking, wealth management, and other financial services. A lot of big finance companies about to get #amazoned.
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Joseph Salegna
Massapequa Park, NY · Member since 2017 · 62 posts · 48 votes
7y
@Bryan Clement It is being redeveloped but still years away and historically that airport has been a mess. What they need to do is extend the shuttle from JFK to LaGuardia (which is probably not even possible) and the boroughs. The only real way to get there is by car or bus and traffic in midday is a nightmare.
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Anthony Angotti
Real Estate Agent · Pittsburgh, PA · Member since 2015 · 1k+ posts · 846 votes
7y
I feel like both of these areas won't see a huge increase in prices. Both Arlington and Long Island are super expensive. I don't know how much higher Amazon alone can push it.
Not local though so my opinion is worth 0
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Jerel Ehlert
Attorney · Austin, TX · Member since 2014 · 890 posts · 759 votes
7y
Check out a map of where the major internet fiber cables run, and their decision will make much more sense: a norther route runs through NYC, a mid-route runs through VA, and a southern route runs through DFW (the other finalist).
Blah, blah, blah, economics, population, tax incentives... Amazon is an INTERNET company 1st, last, and always. If the internet backbone ran through Anchorage AK, that city would be on the finalist list.
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Paul B.
Rental Property Investor · Dallas, TX · Member since 2015 · 503 posts · 504 votes
7y
Originally posted by @Lesley Resnick:

These decisions have to be politically motivated. They do not make economic sense. Companies are leaving these areas not moving in. They are already too expensive. LIC is great because it is 39 sq ft as opposed to 57 for Manhattan.
In terms of pure economics, moving to a location like the Leigh Valley or West Virginia would seem to be a more sensible choice. Land and labor are significantly cheaper and will not price most of their employees out of the area due to the cost. Further, some of these areas would offer tax breaks and building concessions.
50,000 high paid tech employees are not going to move to those places, and they certainly don't have the talent pool for Amazon to only hire locally. It was definitely going to be a major metro area. Even if they are splitting it into two locations, 25,000 would overwhelm the places you mention.
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Paul B.
Rental Property Investor · Dallas, TX · Member since 2015 · 503 posts · 504 votes
7y
Originally posted by @Account Closed:

Amazon's move to New York is a clear signal that they have sights set on expanding into banking, wealth management, and other financial services. A lot of big finance companies about to get #amazoned.
Bingo.
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