When Amazon announced the HQ2 project, the global behemoth’s second headquarters, investors began trying to guess which city Bezos would choose. HQ2 is pretty much guaranteed to increase job growth and raise real estate prices, so getting in early is the closest thing to a sure bet in real estate speculation.
Shortlist of Contenders
Amazon announced a list of 20 finalists in their search for the new HQ2 site this January. Contenders include major cities—Atlanta, Boston, Chicago, Los Angeles, New York City, and Washington—but Amazon spread its net wide to find the best site. Austin, Columbus, Nashville, Newark, and Raleigh are all strong possibilities.
The company plans to invest about $5 billion in the project. According to insiders, Amazon has taken a second look at New York, Newark, and Chicago, along with Miami and Washington, DC. It’s still anyone’s guess as to where they’ll ultimately choose.
Place Your Bets
In order to win Amazon’s favor—and the 50,000 or so jobs that HQ2 will create over the next two decades—the cities on the shortlist have publicly pitched sites that would suit the online marketplace. That also means investors have a good idea of where HQ2 will end up and which neighborhoods would be most in demand.
Some investors have a game plan in place the moment Amazon announces its choice. Others aren’t waiting. Portfolio managers like Ryan Dobratz of Third Avenue Real Estate Value Fund, for example, have placed their bet on Arlington, Virginia, as the winning site. Dobratz has been heavily investing in the Crystal City neighborhood of Arlington he believes Amazon will soon call home.
Boost for the Entire List?
At least half of the counties on Amazon’s shortlist have seen a bump in home prices since the announcement. Pittsburgh, in particular, has gotten a boost as investors hustle to stake their claim in the former steel town.
When Bezos announces the winning city—which he promises to do by the end of the year—expect to see a scramble as investors try to get in before the opportunities dry up. When Apple moved its headquarters to Cupertino, California, home prices shot up a staggering 54.7% within a mile of Apple Park. Expect to see something similar wherever HQ2 ends up.
