Amazon HQ2 Could Crowd Office Markets, Force Rents To Skyrocket In The Winning City
While North America anxiously waits to learn who will win the bid for Amazon's HQ2, cities are looking to Amazon's current home in Seattle for an indicator of future impact.
Though the benefits are seemingly endless — Amazon plans to invest $5B in HQ2 and boasts the new headquarters will bring 50,000 jobs to the winning market — there are several pitfalls associated with hosting the tech giant.
In addition to concerns about the new campus raising residents' median income and pushing housing costs skyward, the new campus could eat into much of the city's available office real estate.
In its HQ2 request for proposals, Amazon requested enough space to accommodate an 8M SF office. Only a year ago, Amazon had predicted its Seattle footprint would reach 12M SF by 2022. This year, it reached 13.6M SF and since 2007, more than $1.9B in building permits have been filed for Amazon space in the Seattle metro area.
Amazon's footprint is so large that it could fill the Empire State Building five times over, BuildZoom reports.
This could be an indication of what is to come for the winner of HQ2. Amazon will build new office buildings in the city as well as take space in existing buildings. Though this typically translates to declining vacancy rates, it could also lead to Amazon crowding out other tenants and causing office rents in the metro to skyrocket.