Amazon HQ2 - REI Opportunity?

208 Replies

Originally posted by @Vikas Raoot :

https://www.bizjournals.com/atlanta/news/2017/09/07/atlanta-likely-in-consideration-for-amazons-5.html?ana=yahoo&yptr=yahoo

Interesting insight considering AMZN is already building a presence in Atlanta.

 I was thinking the same thing. The cost in Georgia is much lower than anywhere up north and it would just be a continuation of the trend of huge businesses establishing a presence here. 

Following big companies that move and make huge investments is never a bad idea. High paying jobs, especially 25k mid to high paying jobs will bring in a ton of mid to low paying jobs as well. 25k jobs like that should bring in an additional 100k jobs to the area. If they pick a big city, this will have an impact, but nothing like it would if they picked a city closer to their 1M in population minimum. 

Originally posted by Account Closed:

Won't the Amazon leadership be asking themselves, among other things, where do programmers/tech talent WANT to live? Wouldn't the answer be the coasts and not the flyover states? Just speculating. Techy folks i'm friends with would change companies before moving to a flyover state to stay with amazon.

 Dallas is a big tech powerhouse between its defense, telecom, airline and energy jobs.

Originally posted by @Jon Holdman :

NY Times did an analysis based on Amazon's stated criteria and picked a winner - Denver.

https://www.nytimes.com/interactive/2017/09/09/ups...

Honestly, I have no idea if that's how it will play out, but their analysis of cities vs. the criteria is interesting.  Some of the same factors already mentioned in this thread.  Atlanta and Dallas get kicked out for bad traffic.  KC for weak job growth.  A "culture of inclusion" (i.e., not "religious freedom" laws) is mentioned at the very end.

Now, as they say "price overcomes all objections".  May well be in the end that some city is willing to throw huge tax incentives on the table and overcome any other negative factors.  I think its a complete guessing game at this point.

 It was a puzzling study, must have been by an intern.

As an example they didnt rank Austin as a University town. They had Boston 3rd in the country for Universities, (MIT< Harvard, BC, BU ring a bell?)  they eliminated Dallas because of an inability to get in and out of the city?  A really bizarre cut seeing as there are not one but two airlines and a very large airport, AND its got one of the best arteries with regard to highways into both the SE, Midwest, Houston and Mexico.

Atlanta would be an option and I am positive  that Estate and the City are working in getting them here.  

@Bart H.   The problem is mass transit not airports.  We have non stops from DFW to Australia, the EAU, and Hong Kong.

The mistake they made was they were thinking about downtown Dallas.  Most of the people I know are not talking about the City of Dallas at all.

They should have read the RFP better.  When experts says Dallas they really mean at least the Metroplex.  Collin County is much more likely to get it.  Just like it got Toyota and State Farm in the last few years.

The idea of Mass transit seems to push it toward Collin Creek instead of Frisco or McKinney.  That is one reason I suggested it.

Of course McKinney has enough area to allow a company to bring 50,000 people and not need a huge amount of mass transit because they would already be in the burbs where most of the people will likely live.

Originally posted by @Andy Krzanowsky :

@Andrew Syrios

I'm with you and we already got the big distribution center out by Gardner to go with the Intermodal.  I'd love to add that area to my holdings but I don't have the connections to venture out of the Lawrence market.

 KC it would definitely take off even more so. And I think we certainly have a shot.

Last year Jeff Bezos bought a large (understatement) house in the greater Washington DC area. DC is also on the short list of possible locations for the new HQ. It may be a coincidence...or maybe not. Regardless of where it ends up, it presents an opportunity to invest and not just if you are early. I believe there will be long term and consistent investment opportunities where ever they land. We will know more in mid-October.

Originally posted by @Nate Waters :

Last year Jeff Bezos bought a large (understatement) house in the greater Washington DC area. DC is also on the short list of possible locations for the new HQ. It may be a coincidence...or maybe not. Regardless of where it ends up, it presents an opportunity to invest and not just if you are early. I believe there will be long term and consistent investment opportunities where ever they land. We will know more in mid-October.

 Remember Bezos owns the Washington Post, and a lot of his activity in terms of lobbying etc is based in DC.  Of course he could want to put a 2nd HQ in DC, but it makes sense for him to have a property in the area, even if the 2nd HQ's never moves there.

I worked at Amazon from 2011-2014 as a tech recruiter, so it's been a while since I've been there, but my guess is that the number one factor (above any tax benefits the state/city provides) would be in the ability to attract and hire software engineering talent in the new city. After all, every new project that they want to build out needs software engineers to get it going. So either the city already needs to have a sizable pool of tech talent or it needs to be a city that the tech talent is willing/able to go to. Seattle was great since Microsoft was already here + the University of Washington is a top 10 CS school and it was a bit more palatable for bay area residents to make the move up here.

A few articles have already pointed this out, but my money would be on Toronto since Canada doesn't have our visa/H1B problems. Just my guess though.

Unfortunately the likely markers for HQ2 are already well established or growing markets. Denver, Austin, Pittsburgh, Atlanta, San Diego etc are already darlings of the REI world for many of the same reasons Amazon would be attracted to them.

Amazon will want to pick a location that allows them to A) recruit aggressively from all over the world and B) capture the best tax incentives by local municipalities.

With all that said you only have to look at Seattle over the last 10 years to se the "Amazon effect". 50,000 high paying jobs will do a lot to lift a local RE market....

I really liked this article about Pittsburgh vying for Amazon's attention. 

https://www.nextpittsburgh.com/latest-news/amazon-become-one-pittsburghs-biggest-employers/

With the fact that Uber, Google, Microsoft, Apple and Autodesk already have strongholds here, thanks in part to Carnegie Mellon University's AI developments, I can see our city welcoming Amazon's 2nd HQ. Amazon is already here with a fulfillment/distribution center and our Mayor, Bill Peduto, is poised to recommend several sites that could accommodate Amazon's requirements: software development talent, near an airport of which we have Pittsburgh Int'l Airport, highway systems and while the city itself houses 306,500 people the greater metro area of 2.36 million is well within Amazon's 1mil. requirement. Pittsburgh is also poised to add incentives besides having a variety of available sites, to tax breaks/grants and workforce training not to mention that Pittsburgh is a hub for robotic, technical and manufacturing advancements. Since we have the talent, the land and the commitment to welcome Amazon's vision, I see Pittsburgh a strong candidate for it's future investment. 

Try to think about this through Amazon's lens. What does Amazon NEED?

NEED

They need LOTS of tech people, and QUICKLY. What cities have that? Not Detroit

They need to be able to RECRUIT to areas that will draw talent (whether you like Seattle or not, you can argue its an acquired taste -- costly and not sunny)

They need LOTS of space and they need to be able to scale quickly

They need something this new location can offer that dreary Seattle cannot (Sun and lower cost of living)

WANT

Amazon would love to get massive tax credits

Amazon would love to get cheap talent right out of school.

So given this criteria, I believe Dallas, Austin, North Carolina, Denver, Orlando would be likely targets.

BONUS FOR AUSTIN: Amazon just bought Whole Foods. I used to live in Austin and so I know Whole Foods holds leases on EMPTY office space all over downtown.

Detroit is bad for recruiting

Chicago is not great for tech

THINK like Amazon and you will win.

just throwing this out there. I don't think Dallas itself is the only city in this area that could be in the running. I could easily see some of the suburbs, where the ability to build custom space, would be attractive. Even existing space in the "suburbs" of Dallas would provide many of the same advantages of new space and the location to Dallas.

@Josh Calcanis

I am not a genius, but I am pretty sure I already know where this whole thing is going.

These rust belt cities (including my hometown of Kansas City) who think they have a chance at snagging Amazon are fooling themselves. Amazon is going to look at a high growth business friendly area with a large tech presence already.

I would be willing to bet that Amazon has already decided on Austin, Texas.

@Account Closed I love the idea of Detroit getting it. I can't think of another city where Amazon would have the square footage available as a downtown campus. It seems Amazon would also have a significant sway with the city/state governments to a degree they wouldn't get elsewhere.