Amazon HQ2 - REI Opportunity?

208 Replies

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.

Jon we can only dream (  Amazon HQ2 RFP information )

I’m a young buck and over the years only housing that has seen increase 

for new Milwaukee Buck areas have been where I have been camping out 

the last few years are the downtown condos and downtown housing.

Mecca area : downtown housing pricing appreciations play

US Cellular area : downtown housing pricing appreciations play

Bradley center : downtown housing pricing appreciations play

I’m personally expecting the same for the new area which is within 13 seconds

of Bradley center. 

People who have been currently making money for the new upcoming area are

local contractors, downtown condos owners and downtown housing owners, 

downtown airbnb owners, local colleges ( MATC & Marquette ),  downtown 

businesses, big money downtown developers ( generation upon generation investors ).

Amazon 2nd headquarter would be best served within Milwaukee county.

Example ~ Football competition Packer versus Seattle revenue generated.

We are up 1 and only need two more possible outcomes over the next year.

( Playoff victory and being pick as 2nd headquarter for Amazon )

@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.

I thought ATL was going to be their new HQ2.  Anywhere they go is going to be a boom.  RE is all about jobs and employment.  Anytime an employer or the Military / Gov bring jobs to a community, the RE market goes up.  It is a good choice, it is as far from HQ as you can get and a transportation hub for the East coast.

@Matt R. Do you think they will put their headquarters so close? I was expecting something on the other side of the country, or at least somewhere in the middle. I don't see them sticking to the West coast, but then again who knows!

Originally posted by @Jake Thompson :

@Matt R. Do you think they will put their headquarters so close? I was expecting something on the other side of the country, or at least somewhere in the middle. I don't see them sticking to the West coast, but then again who knows!

 Idk if that is a consideration and it is about the same distance as Denver. I think their major concern is being able to attract future top talent and SD could go far in that respect. I know San Diego has an international reputation for having a strong outreach team attracting new employers. They are probably very well prepared to reel this one home too. They also still own the old Chargers stadium and that would be near perfect for the Amazon HQ2. 

@Josh Calcanis I'll go out on a limb and say any of these city-bid packages are going to involve housing proposals, infrastructure changes, etc. I can help but think you'll have a long, long, loooooong runway to see which cities are going to make the "finals list" and everything else. No city is going to be able to put together a bid package quietly, any quieter than they could do for the Olympics.

Consequently, I think we are a long way from any kind of actionable timeline. Just my 3 cents...

Originally posted by @Stephen Bechtolt :

I have done some reading about their potential move, my question is NJ or NYC even in consideration?

 From a tax perspective, completely illogical.  From a talent, location, population density perspective, it can make sense.  Seeing that Seattle is a second tier city, I can see them following in that rather than going with one of the Big 4, ie. NY, LA, Chi, Dallas.  Conversely, I can't see them going with a tertiary unless the location is strategically located with access to lots of colleges, good transportation, leisure amenities, and plenty of suburban markets with growth potential.  

In the NE specifically, I can see Philly, Baltimore, Boston, Charlotte (probably not due to social issues currently), and DC.

@Account Closed i can attest to the outrageous taxes here in the NJ / NYC haha.  Seeing where Amazon does end up is like waiting open up that Christmas present that has been under the tree for a month.  Guess time will only tell but where ever they end it will quite the uproar.

agree with @Jon Holdman ..its nothing but speculation at this point. People from Chicago would love to have Amazon set shop here like everyone else wants Amazon in their city. There are lot of variables involved than just universities, or airports....we shall see.

Arent the front runners Chicago, Boston or Denver?

I read an article about yes everyone wants Amazon but havw they cconsidered the effects of amaon coming into their towns?

Cost of land/properties will increase for sure. Rents will increase. Living affordability will jump. 

So what are the hypothetical investment plans PB'ers have in mind.  Do you buy townhouses, condos, anything you can get your hands on near the new HQ2?  Or you analyse what neighborhoods you already find high paid professionals in and buy there?  Or by school district?  Buy commercial properties near HQ2? Buy raw land near HQ2?

If they come to Boston - where GE is moving their HQ as well - there will be significant additional pressure on the housing market. 

It seems to me that MFRs are already in high demand for investors and are commanding crazy prices.  

I showed a disgusting slum of a 3-plex in East Boston a few weeks ago that was priced at $600K.  Another, in much better shape hit the market in JP at $1.2M and another in Brighton at $2.5M.

It's hard to imagine prices going much higher, but that would be the natural outcome.

They're going to move someplace where the cost of operating is low, where they will get the biggest bribe  incentive to move there, and where the politicians are "malleable." I don't see any of the traditional tech hubs fitting the bill.


I know Baltimore and the new Port Covington neighborhood (part of Under Armour's new HQ) will be lobbying hard...

https://www.google.com/amp/www.baltimoresun.com/news/maryland/politics/bs-md-hogan-amazon-20170915-story,amp.html

They also just got a big investment from Goldman..

https://www.google.com/amp/www.baltimoresun.com/business/under-armour-blog/bs-bz-port-covington-partner-20170913-story,amp.html

This would be huge for Baltimore. Already a good REI market, it would become even better.

As a local investor in Baltimore, I would love to see Amazon move here. We have a great location- a good port, rail, and an international airport with a 30 minute drive. The cost of real estate is still low compared to many other areas and we currently have a business friendly Governor. This city has world class medical facilities, great restaurants, and within a few hours drive you can be at the ocean, in the mountains, in Philly, NYC, or DC. On the other hand- finding 50,000 people to employ that will show up to work on time that don't already have a job is going to be a serious challenge.  With the assumption that the average job will pay 12-15 per hour that will get the average worker a lot further in Baltimore then it would in other places like Boston, or NYC, or Portland, or LA, etc.

Account Closed   All the players with cash will be buying raw land and basically everything else.  I have heard of several REITs and hedge funds getting ready to make plays.  Once it is down to a few possibilities some will start getting things under option.

Of course hedge funds might put 100 times more under option than they plan on buying.  If the prices rise they will make a fortune.

Believe me the price people are having to pay for a year long option in DFW has already gone up.

If there is a list of finalists ("going back to the well" for more incentives) then every place mentioned will be impacted.

Here's an interesting analysis of potential markets for the Amazon relocation.

https://medium.com/migration-issues/no-room-at-the...

It looks at markets with a surplus of housing currently available, metros that have competitively priced housing, places with sufficient labor pool, plus a few other items to ultimately get to an overall grade for potential metros with Philadelphia, Washington D.C. and Chicago topping the list.

@Jeremy Michiels   I could not more strongly disagree with much of the thinking in that article.  To start with... Amazon is probably not looking for existing housing stock.  They are also expecting to recruit world wide for the people to work there.  They have stated repeatedly it has to be a place people will be willing to relocate to not a place that has 50,000 workers waiting for the jobs.

Originally posted by @Antoine Martel :
Originally posted by @Andrew Syrios:

Kansas City is making a run for HQ2 and that's who I am pulling for. http://www.kansascity.com/opinion/editorials/article172157917.html

 That would be amazing and I heard that KC was one of the top choices for them. 

 We'll just have to cross our fingers...

Originally posted by @Mark Owens :

As a local investor in Baltimore, I would love to see Amazon move here. We have a great location- a good port, rail, and an international airport with a 30 minute drive. The cost of real estate is still low compared to many other areas and we currently have a business friendly Governor. This city has world class medical facilities, great restaurants, and within a few hours drive you can be at the ocean, in the mountains, in Philly, NYC, or DC. On the other hand- finding 50,000 people to employ that will show up to work on time that don't already have a job is going to be a serious challenge.  With the assumption that the average job will pay 12-15 per hour that will get the average worker a lot further in Baltimore then it would in other places like Boston, or NYC, or Portland, or LA, etc.

 I think I read the average pay for these new Amzn jobs is 100k. Perhaps count on another 50,000 non Amazon jobs added at that hourly rate. 

Good luck!