In a recent article by Peter Grant in the Wall Street Journal, Grant delved into how Amazon.com Inc.’s decision to add a second headquarters could affect Seattle’s economy, where Amazon’s original base resides.
Growth in the mega-business was initially assumed to be concentrated in their original Seattle headquarters, but last month, Amazon announced it would now be investing more than $5 billion in the new location, creating an additional 50,000 jobs. Prior to announcing their expansion, the company planned to add another 2 million square feet of office space to its already 8.1 million square feet in Seattle.
In a recent report titled “Sleepless in Seattle,” Green Street, a real-estate research firm, lowered its 2018-2021 growth estimate by 1.5 percent. Based on the report, growth is estimated to be modestly slower in the apartment, industrial, and strip-center sectors than before.
“Real-estate experts believe Amazon's decision might inflict more harm to Seattle area growth than Boeing Co. did when it moved its corporate headquarters to Chicago in 2001,” the article said.
According to the Green Street, Seattle has recently been known to have one of the strongest real-estate markets in the country, with commercial property values doubling since 2010. Amazon accounts for as many as a third of the jobs created since that time, which leads to the curiosity of how it will impact the single-family market, as well.
“That growth has had a multiplier effect throughout the regional economy, boosting residential prices, retail rents and demand for other property,” the article said.
Though Amazon hasn’t commented on the reasons behind why it is expanding, Green Street is speculating that it has to do with a shift in the city’s regulatory climate, such as the city approving an income tax on wealthy households, which is currently being challenged in court.
To read the full article, click here.