Rental Property Investor · Orlando, FL · Member since 2015 · 131 posts · 62 votes
Afternoon BP,
After news broke of Amazon moving forward on finding a new HQ, I got really excited for the possibility of a new/increased opportunity in a new area. I currently own and rent in Central Florida, but wouldn't mind investing elsewhere if the opportunity was right.
I lived in Seattle for 2 years and saw (have seen) what Amazon/Microsoft did not only for the job market, but rent as well.
I know the Triangle in NC was thrown around as a hopeful location, but it's far too early to tell where it's going.
My question to the community is where/when do you really start to dig into the surrounding area that will become the new site and how do you as an investor stay up to date on what's happening with a big build like an Amazon HQ2?
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.
Investor · Orlando · Member since 2016 · 151 posts · 72 votes
9y
@David Thompson yep, I didn't go there, but it's totally true. Austin is a liberal mecca, and so is Bezos. It means more to them than they would publically admit, but it does. As an aside, they also just completed a major airport expansion and right before I left, were adding more and more direct flights by the month.
Amazon-Wholefoods in TX makes too much sense. I just don't see Boston or Chicago as true competition there. Maybe Denver.
Rental Property Investor · San Francisco, CA · Member since 2013 · 12 posts · 30 votes
9y
Like a few folks have already figured out I've got my bets on TX - probably Austin or Dallas. The only thing more important than having local talent is being able to attract non-local talent based on low cost of living and family-friendliness. Silicon Valley and Seattle folks know what I'm on about. If they announced HQ2 in Austin today I'd be on a flight there next week and I know more than a few of my tech industry friends won't be too far behind.
In general it's wise to follow the big movers and shakers like Amazon. I bet on a Amazon distribution center and been rewarded with high occupancy and accelerated appreciation. In fact one of my tenants was a construction manager building the distribution center.
Investor · Orlando · Member since 2016 · 151 posts · 72 votes
9y
@Clifford Tran totally agree. I moved to Austin from San Francisco about 4 years ago and when the moving company asked where i was going, they replied "You and everyone else". They said 50% of their business was moving Bay Area people to Austin!
Investor · Chicago, IL · Member since 2016 · 4 posts · 1 vote
9y
Not going to Texas. Not urban enough. Friends here in commercial real estate tell me chicago. Makes total sense: central, urban, affordable, easy to recruit talent.
Investor · Orlando · Member since 2016 · 151 posts · 72 votes
9y
@Andrew Wong I do believe it is between Denver and Austin. Austin's airport continues to improve, but their traffic situation is not improving, and will not improve, anytime in the foreseeable future.
Real Estate Agent · Salem, NH · Member since 2017 · 95 posts · 34 votes
9y
Just like General Electric HQ building in Boston I see other large companies coming. Boston has the talent that Amazon needs. Wouldn't be surprised if amazon picks an outside city of Boston. With two airports MHT and BOS nearby it offer maximum transit options.
@Andrew Wong I do believe it is between Denver and Austin. Austin's airport continues to improve, but their traffic situation is not improving, and will not improve, anytime in the foreseeable future.
Austin doesn't make sense to me. Dallas area has 2 large airports. DFW and Love (though it's still small compared to DFW). There are smaller airports all around too. As far as I understand it, Austin does not have much as far as tech goes so no built in talent pool to pull from. Dallas/Richardson/Plano has been described as the "tech corridor" for Texas which is why we moved to Plano (and now Frisco) when we decided to make the leap and move here even without jobs. (It's worked out very well, thanks!) IMO I think (and I'm no expert) that Plano's Legacy/Corporate/Headquarters Dr area (so named because of all the corporations) would be a desirable spot except for the traffic issues right there (the city is "working on it) or Frisco along the DNT corridor would also be desirable. Talent pool nearby, access, etc. The other location would be maybe where 121 and 75 meet as this would provide lots of access.
Investor · Orlando · Member since 2016 · 151 posts · 72 votes
9y
@Debra Grumbach I'm in the tech industry, and I can tell you 100% that Austin has tons of tech. It's one of the hottest B2B, if not hottest, startup communities in the US.
Amazon, EA, Apple, Facebook, Google, Arkane Studios, Homeaway, etc, are all ramping up their footprints in meaningful ways.
Investor · Pflugerville, TX · Member since 2014 · 152 posts · 94 votes
9y
Austin has a young and talented employment pool but the city has not been able to close the deal on any large employers in the past 10+ years. Dell is down to a shadow of what it once was, Applied Materials and the other semiconductor places sent all their jobs overseas. Samsung seems to be the only big name putting more "real jobs" into the area. I think the city is getting away from giving the big handout packages to these companies so I would be surprised to see this large of a move into Austin anytime soon. My guess is Amazon is just throwing Austin out there to get some other city to give them the incentives that they want.
Would love to see Amazon make the move here but really just so my rental properties would have that many more candidates.
Rental Property Investor · Manassas VA / Columbus OH /St. Johns FL · Member since 2017 · 86 posts · 25 votes
9y
With my experience as an IT Guy. Texas got the high weight in this game. With no income tax, tropical Climate and Low cost of living, etc most of the software guys prefer to re locate here with no additional incentives.
Austin has a young and talented employment pool but the city has not been able to close the deal on any large employers in the past 10+ years. Dell is down to a shadow of what it once was, Applied Materials and the other semiconductor places sent all their jobs overseas. Samsung seems to be the only big name putting more "real jobs" into the area. I think the city is getting away from giving the big handout packages to these companies so I would be surprised to see this large of a move into Austin anytime soon. My guess is Amazon is just throwing Austin out there to get some other city to give them the incentives that they want.
Would love to see Amazon make the move here but really just so my rental properties would have that many more candidates.
Google just took up 3/4ths of the new tower on San Antonio street downtown, so not sure what you mean regarding 'not closing the deal on large employers'. Facebook has grown considerably on W6 as well. I could go on and on.
Investor · Pflugerville, TX · Member since 2014 · 152 posts · 94 votes
9y
How many people do Google, Facebook actually employ in Austin? Not much. They don't even show up on any of the metrics for employees over 1000 people. Mostly just consolidating local offices into a larger, more visible one so they can say they have a footprint in a "cool" city. Largest employers in Austin by an order of magnitude are state/local government, UT, local school districts and a couple of semi-conductor/high-tech manufacturing facilities. Austin has a robust satellite center environment for lots of tech companies but none of them want to setup anything bigger here other than an IT or R&D center.
Don't get me wrong, Austin could do well by an employer with a large footprint but they aren't willing to shell out the bucks to pay them off with tax incentives like they did in the 90's and early 2000's. And that is ultimately all that companies care about when making these types of decisions.
Investor · Orlando · Member since 2016 · 151 posts · 72 votes
9y
@Christopher Gilbert, The google highrise is 29 floors in one of the most coveted blocks downtown. Imagine how many 6 figure salaries that holds. Austin won't shell out the tax incentives anymore. But that's because they no longer have to. If that's all companies cared about, Amazon would go fleece Detroit or Dayton Ohio and this thread would be a moot point.
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
9y
Great discussion gents! As an investor in the Milwaukee market we are looking for an additional spike into the local economy. Looking forward to the rebuilding of the Bradley center to see what that does for home prices and the flow of cash into Milwaukee.
Not going to Texas. Not urban enough. Friends here in commercial real estate tell me chicago. Makes total sense: central, urban, affordable, easy to recruit talent.
It's totally going to be Chicago. Rahm will put all possible chips on the table to make it happen. Corporate relocation is so ingrained into his desire for this city; there's just no way he's going to let Amazon pass by.
Real Estate Broker · Salem, OR · Member since 2017 · 101 posts · 43 votes
9y
This is an interesting discussion, do you know when Amazon will award the city and begin construction? I haven't seen any dates yet in any of the articles I've read, I'm guessing it's going to be at least 2-3 years for everything to be completed?
According to the RFP responses are dues by October 19, 2017. The selection and announcement will be in 2018. So selection could be as soon as four months or as long as 16 months. Lots of details in the RFP.
I think anything any of us offer as far as "it will certainly be XYZ city" is nothing but speculation. Every city in the competition is going to have a long list of reasons why they are the best choice.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
9y
San Diego might be the sleeper city here. I would not be surprised by NYC or LA. I would think Denver and Portland in the running and if you asked future Amazon hires making $$$ most probably would say NYC or LA? I guess possible Austin and they might make a Houston run to help out. The future impact will be enormous we can speculate.
Real Estate Agent · Fort Collins, CO · Member since 2016 · 246 posts · 142 votes
9y
@Josh Calcanis, I thought the same thing when I heard the news. 50,000+ new jobs, what a dream for a real estate investor! As far as where/when to dig in, I would say as close as you can and as soon as you can, that's my first thought.
I also lived close to Seattle a few years ago and I agree, it was crazy to watch the way Amazon affected the areas. It was the same thing in the bay area, I lived there when silicon valley was taking off and the ripple effect there still hasn't tapered off. So all that to say, investing off of Amazon's potential impact is speculation...but in Seattle and the Bay, speculation has had a great ROI.