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Amazon’s HQ2 Announcement Shares Valuable Insights on the Future of CRE

By February 7, 2019 July 31st, 2019 No Comments
Amazon HQ2

If there was one major, newsworthy real estate story of 2018, it was Amazon’s HQ2 announcement. Audiences were on the hook for months following every move and every meeting. Of course, being an Atlanta-based CRE appraisal management company, we were especially tuned-in at MountainSeed. Until Amazon’s December announcement, cities were abuzz with where the giant would land and what it would mean for the town of choice, particularly as it related to real estate and job markets.

Even more recently, the giant scrapped its plans for the Long Island City hub. Between community outcries and local politicians’ lobbying, Amazon decided to expand only to Arlington as well as complete a key logistics center in Nashville, Tennessee. Regardless of recent developments, the economic impact of the expansion is, without question, huge. Essentially, this is major commercial real estate news for good reason.

Beyond being one of the most newsworthy proclamations of 2018 that even spilled into 2019, Amazon’s HQ2 announcement also made some important, not so overt, statements about the future of commercial real estate. Experts are weighing in about what the Amazon HQ2 decision means for 2019 and beyond. From location decisions to community transformation, here’s what Forbes’ analysts think is on the horizon for commercial real estate.

5 Things We Can Learn About the Future of CRE From the Amazon HQ2 Announcement

 

Data Driven Decisions

As we move into 2019, we’ll continue to see more and more emphasis on data, and Guy Zipori of Skyline AI says that’s for good reason. As he aptly points out, Amazon evaluated countless data points from its finalist cities to come to a decision. While the corporation had access to the best of the best in data, the days of technologically advanced programs that populate data solely for major corporations is dwindling. Soon enough, access to data will be available for all types of businesses, regardless of size and will ultimately become a part of nearly every CRE deal in the future.

Corporate Value

Often the many points that were made during Amazon’s hunt surrounded infrastructure. According to Jeremy Brandt of Fast Home Offer, large companies the likes of Amazon rely on availability of employees, excellent airports and thorough fares, tax breaks, and other incentives that support operations while reducing overhead costs. As a corporate investor, considering those things, along with other valued characteristics, is integral in their final decision.

Nearby Investments

It should come as no surprise that purchasing and maintaining commercial and residential real estate near the Amazon HQ2 is a smart move. As opening gets closer and closer, property value is bound to increase. In fact, Alex Radosevic of Canon Business Properties Inc says not only is it likely, it’s an almost guarantee. He says if you’re looking to sell, wait. You’ll likely have a larger return down the road.

Mixed-Use Opportunities

Investors looking to capitalize on HQ2 should also consider capitalizing on trendy mixed-use developments says Nathaniel Kunes of AppFolio Inc. He recommends cross-referencing potential choice neighborhoods with present developments to see where smart investments might land. According to Kunes for Forbes, “Identifying this trend and investing early could be a lucrative move.”

Transformative Visionaries

David Kaufman of Cleeman Realty Group once aptly summarized the power of local community impact by saying, “The key to transforming a community is real estate developers partnering with local government. Long Island City was a manufacturing hub for decades before it was transformed by the city and investors.” Ironically, that same power is the very thing that ultimately changed Amazon HQ’s course. It was truly the power of the people in action. While the decision has since reversed, the lessons are still the same: through the hard work and the vision of industry experts, cities can be forever changed. Of course, only time will tell how true that is for Arlington and Nashville.

For even more on the latest residential and commercial real estate trends, tune into the MountainSeed blog or newsletter. We’ll make sure you’re getting the real estate news you need now.